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Active fund managers lag those lazy index-huggers

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Original article by David RogersDaniel Palmer
The Australian – Page: 19 & 31 : 7-Oct-16

Data from S&P Dow Jones Indices shows that the returns of most Australian active fund managers have lagged their benchmark index over periods of one, three, and five years. Mid-cap and small-cap funds are the only ones to have outperformed their benchmark over these periods, according to data up to the end of June 2016. BetaShares MD Alex Vynokur notes that global themes and decisions regarding asset allocations have become a major influence on returns.

CORPORATES
S&P DOW JONES INDICES LLPBETASHARES CAPITAL LIMITEDSTANDARD AND POOR’S ASX 200 INDEXSTANDARD AND POOR’S ASX ALL ORDINARIES ACCUMULATION INDEXWILSON ASSET MANAGEMENTWAM EQUITY FUNDWATERMARK FUNDS MANAGEMENT PTY LTDWATERMARK MARKET NEUTRAL FUND LIMITED – ASX WMKANTIPODES GLOBAL INVESTMENT COMPANY LIMITED – ASX APLPENGANA CAPITAL LIMITEDPENGANA AUSTRALIAN EQUITIES FUND

Citi tips ASX to hit 6000 by end of 2017

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Original article by Jessica Sier
The Australian Financial Review – Page: 31 : 7-Oct-16

Citigroup is bullish about the outlook for Australian equities and corporate earnings. It forecasts that the benchmark S&P/ASX 200 will gain 10 per cent over the next year or so to top the 6,000-point level by the end of 2017. Citigroup also expects the corporate sector to post earnings growth of eight per cent in 2016-17, following an 11 per cent decline in 2015-16. The firm is also upbeat about global equities, anticipating a 10 per cent rise by the end of 2017.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEXCITIGROUP PTY LTDMORGAN STANLEY AUSTRALIA LIMITEDRESERVE BANK OF AUSTRALIA

Sovereign debt could well be the driver of the next share selloff

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Original article by Philip Baker
The Australian Financial Review – Page: 32 : 6-Oct-16

Australia’s benchmark S&P ASX 200 is currently trading on a forward price-earnings ratio of around 16 times, compared with its long-term average of about 14.5 times. The index reached a 2016 high of 5,587 points at the start of August, and despite a number of pullbacks it is still three per cent higher than at the start of the year. However, the prospect of an eventual end to quantitative easing by central banks is likely to put upward pressure on government bond yields, which will in turn weigh on sentiment toward equities.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ROYAL BANK OF SCOTLAND GROUP PLC, THE GOLDMAN SACHS GROUP INCORPORATED, JP MORGAN CHASE AND COMPANY, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF RICHMOND, SYDNEY AIRPORT – ASX SYD, TRANSURBAN GROUP LIMITED – ASX TCL

Henderson, Janus create $US6b giant

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Original article by Vesna Poljak, Jessica Gardner
The Australian Financial Review – Page: 13 & 16 : 4-Oct-16

Australian-listed global fund manager Henderson Group will merge with US-based Janus Capital Group. Henderson shareholders will control 57 per cent of the new entity, which will be called Janus Henderson GlobalInvestors and boast $US320bn worth of assets under management. Henderson CEO Andrew Formica and former Pimco executive Dick Weil will be joint CEOs of the merged company, which will be dual-listed on the Australian and New York stock exchanges.

CORPORATES
HENDERSON GROUP PLC – ASX HGG, JANUS CAPITAL GROUP INCORPORATED, JANUS HENDERSON GLOBALINVESTORS, PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

OPEC deal sparks energy stocks rally

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Original article by Jessica Sier, Jens Meyer
The Australian Financial Review – Page: 30 : 30-Sep-16

The S&P/ASX 200 index rose one per cent to 5,471.3 points on 29 September 2016. Energy stocks performed strongly following a decision of OPEC members to reduce production in the coming months. The energy sector closed 6.3 per cent higher, with Beach Energy gaining 10 per cent and Santos, Origin and Woodside all climbing more than seven per cent.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, BEACH ENERGY LIMITED – ASX BPT, SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, WOODSIDE PETROLEUM LIMITED – ASX WPL, FORTESCUE METALS GROUP LIMITED – ASX FMG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, LYNAS CORPORATION LIMITED – ASX LYC, SPARK INFRASTRUCTURE GROUP – ASX SKI, MIGME LIMITED – ASX MIG, SOSV, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD

Bull market in bonds not over just yet: Citi

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Original article by Chris Kohler
The Australian – Page: 32 : 27-Sep-16

The yield on Australian 10-year government bonds peaked at 2.13 per cent on 21 September 2016, but it has since retreated to below the two per cent level. Citigroup does not believe that the recent spike in bond yields will signal the end of the three-decade bull market, and the firm does not expect the rise in yields to be sustained. Citigroup notes that financial stock are among those that should benefit from higher bond yields, while it says Australian stocks that are vulnerable include real estate investment trusts and utilities.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, APA GROUP – ASX APA, SYDNEY AIRPORT – ASX SYD, TATTS GROUP LIMITED – ASX TTS, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, HEALTHSCOPE LIMITED – ASX HSO, QANTAS AIRWAYS LIMITED – ASX QAN, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, CALTEX AUSTRALIA LIMITED – ASX CTX, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, EUROPEAN CENTRAL BANK

Investors warned not to expect smooth ride

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 23-Sep-16

Australian equity strategists are cautious about the near-term outlook for the domestic bourse, with most still expecting the S&P/ASX 200 to be trading at around the 5,500-point level at the end of 2016. Meanwhile, Tony Brennan of Citigroup forecasts that the benchmark index will top 5,750 points by mid-2017. With the US Federal Reserve opting to leave interest rates on hold in September, David Cassidy of UBS says the presidential election could influence the timing of the next interest rate move.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

Chi-X accuses ASX of freezing the market

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Original article by Vesna Poljak, Jessica Sier
The Australian Financial Review – Page: 13 & 18 : 22-Sep-16

ASX Limited has been accused of mismanaging an outage which occurred on 19 September 2016. The exchange operator put the market in "enquire" mode, thus preventing stockbrokers from cancelling their open orders on the ASX and executing them at rival exchange Chi-X Australia. John Fildes, the CEO of Chi-X, said the ASX should have put the market in "adjust" mode, which is less restrictive.

CORPORATES
ASX LIMITED – ASX ASX, CHI-X AUSTRALIA PTY LTD, TABB GROUP INCORPORATED, AUSTRALIA. DEPT OF THE TREASURY

Two-thirds of funds beaten by the index

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 29 : 20-Sep-16

Data from Morningstar shows that 36.25 per cent of Australia’s actively-managed large-capitalisation funds matched or exceeded the return from the S&P/ASX 200 Accumulation Index in the year to 31 August 2016. This compares with 37.16 per cent over a three-year period, and 35.9 per cent over five years. In contrast, the five-year performance of US actively managed large-cap equity funds against the S&P 500 was just 9.5 per cent. Julian Beaumont of Bennelong Australian Equity Partners notes that Australia’s large-cap funds are more likely to engage in so-called index hugging.

CORPORATES
MORNINGSTAR PTY LTD, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, STANDARD AND POOR’S 500 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, STATE STREET GLOBAL ADVISORS LIMITED, STANDARD AND POOR’S ASX SMALL ORDINARIES ACCUMULATION INDEX, RAMSAY HEALTH CARE LIMITED – ASX RHC, PRIMARY HEALTH CARE LIMITED – ASX PRY, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

IT system fault floors ASX

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Original article by Jessica Sier
The Australian Financial Review – Page: 1 & 2 : 20-Sep-16

Stock exchange operator ASX Limited has indicated that an "internal hardware failure" rather than a cyber attack was responsible for technical problems that curtailed sharemarket trading on 19 September 2016. The market opened later than usual and closed early, with just $A169m worth of shares in the top 200 stocks changing hands. The ASX has stressed that the problems were not related to the issues that disrupted trading for four hours in 2011.

CORPORATES
ASX LIMITED – ASX ASX, CADENCE CAPITAL LIMITED – ASX CDT, CITIGROUP PTY LTD, PEAK ASSET MANAGEMENT PTY LTD, BLOCK EVENT, CREDIT SUISSE (AUSTRALIA) LIMITED, IG MARKETS LIMITED, CHI-X AUSTRALIA PTY LTD, RIVKIN SECURITIES PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF THE TREASURY