In conducting this review of The Jack Brockhoff Foundation’s investment strategy we have come across a number of issues, which unchecked could result in the portfolio’s managers from taking on excess risk or becoming too concentrated toward particular sectors.
We, of course, appreciate that the past year has been extremely difficult for investors and advisers alike, particularly for risk-averse asset allocators who (quite sensibly) tend to hold shorter duration bond portfolios and lower exposure to equities and property. It’s the nature of markets to surprise, and on that basis FY2016 certainly didn’t disappoint.
Looking forward we face a similar problem to last year, except we have now further advanced down the path of lower interest rates and tighter equity risk premiums. Almost all assets now look expensive, and the small pockets of opportunity uncovered over the past year have either been exhausted or are no more attractive than roulette. On the balance of probability, it’s probably not going to end well.
This brings us to the central question as to whether the Foundation’s existing investment strategy remains appropriate.
As we discussed throughout this report we find a number of areas where the current approach to asset allocation and income focus could, in fact, be detrimental to long-term returns and, inevitably, to the ability of the Foundation to meet its objectives in perpetuity.
Our recommendations provide a summation of our views on these key issues and suggestion of how to manage these risks.
Please bear in mind that for ease of reading we have refrained from getting writing too much about the details of our methodology, assumptions, and research, however, I am more than happy to answer questions or elaborate on any matter discussed in this document.
Feel free to contact me on 0406 695 257 or [email protected]
Best regards,
We, of course, appreciate that the past year has been extremely difficult for investors and advisers alike, particularly for risk-averse asset allocators who (quite sensibly) tend to hold shorter duration bond portfolios and lower exposure to equities and property. It’s the nature of markets to surprise, and on that basis FY2016 certainly didn’t disappoint.
Looking forward we face a similar problem to last year, except we have now further advanced down the path of lower interest rates and tighter equity risk premiums. Almost all assets now look expensive, and the small pockets of opportunity uncovered over the past year have either been exhausted or are no more attractive than roulette. On the balance of probability, it’s probably not going to end well.
This brings us to the central question as to whether the Foundation’s existing investment strategy remains appropriate.
As we discussed throughout this report we find a number of areas where the current approach to asset allocation and income focus could, in fact, be detrimental to long-term returns and, inevitably, to the ability of the Foundation to meet its objectives in perpetuity.
Our recommendations provide a summation of our views on these key issues and suggestion of how to manage these risks.
Please bear in mind that for ease of reading we have refrained from getting writing too much about the details of our methodology, assumptions, and research, however, I am more than happy to answer questions or elaborate on any matter discussed in this document.
Feel free to contact me on 0406 695 257 or [email protected]
Best regards,
