DAA change: reduce cash, increase emerging market equities

We’ve been underweight the emerging markets equities for some time, given the higher risks to the region posed by COVID and the challenges facing Chinese property. (Chinese equities make up about a third of the emerging markets.) Emerging markets have underperformed developed markets significantly over the last year and are now trading at a substantial discount to the rest of the world’s equities. The Chinese government has also indicated that it will take a number of measures to support equity markets, including stimulating the economy, allowing non-Chinese auditors to review the auditing of Chinese companies with overseas listings, and not introducing further measures to curb the operations of Chinese technology companies. With this improved valuation and changing sentiment we are reducing our underweight to emerging markets equities, funding the increase from cash.

Clients who are logged in can access the updated model portfolio files and standard text from our downloads page, and will see the full details of the portfolio changes and suggestions for implementation below.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Receive our investment insights

Something went wrong. Please check your entries and try again.