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Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Market commentary, portfolio positioning and outlook

After nearly a decade of a mostly uninterrupted rise in equity markets, the final months of 2018 saw a sharp pick up in volatility and a decline in stock markets around the world. Headwinds for the markets have been building over the last few months: central banks have persisted with interest rate increases and ended their QE programmes, uncertainty surrounding Brexit has continued, the trade war between the US and China has intensified and global growth has slowed.  

November Webcast Replay
With the PAM Investment Management Teams

With the current market environment causing uncertainty and testing investors’ nerves, Pacific Asset Management invited clients to listen and take part in the Pacific Weekly Investment Meeting. Matthew Lamb (CEO), was joined by Will Bartleet CIO / Portfolio Manager of Pacific’s range of multi-asset solutions and by our Emerging Markets and G10 Macro rates fund teams. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

As 2018 draws to a close it is easy to forget that Emerging Markets were outperforming their developed counterparts only last year. This has now largely been reversed and brings us back to where we were in 2016 in relative terms. The MSCI Emerging market index remains at least 30% cheaper than the S&P on most measures. 

Pacific Asset Management was recently invited by The Investment Association (IA) to produce a short film with ITN for the ‘Building Trust and Delivering Value’ series.  The film highlights the effects of the industrialisation of the Asset Management industry and is being launched at The IA's Stewardship and Governance Conference on the 22nd November 2018. 

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager

One of the biggest side effects of $14 trn of QE/Balance sheet expansion by the Fed/BoE/ECB and BoJ since the GFC, has been asset price inflation. This has created immense wealth for the lucky people who were long assets in various forms, such as housing or equities. Invariably this has increased the wealth divide to extreme levels and a generation of asset winners who believe it was their investing genius that acquired this wealth, when largely it was just a by-product of public policy. Not only those lucky individuals, but a large proportion of the investment industry may have fallen for the same self-deception. The fact is the lowering of central bank rates on inflation targeting and QE programs, has allowed the UST 10Y (and many other key government bonds) to rally since 1981. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Taiwan remains one of our favourite markets. It enjoys the lowest cost of capital in the emerging market universe and has a large number of companies with net cash on the balance sheet. Many of these stocks pay dividend yields in excess of 5.0% and are often majority controlled by their management. 

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager 

In the dark days of WW2, Churchill was presented with the proposal of cutting funding for the arts. His reply was, “Then what are we fighting for?” That was about the Arts, but what about education? For some decades now, we have been effectively taxing education. Is Education meant to be capitalist? Or is it meant to be about what we are as a society - striving for a constantly better future? Leaving this debate hanging, let’s look at the economic effect and ask.   

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Unlocking value in Japanese companies 

Assets that offer asymmetry, where the upside potential is greater than the downside risks are the holy grail of investing. Sometimes these are found in unlikely places; one such opportunity lies within the Japanese stock market. In these uncertain times, let’s start with the downside protection. This comes in the simplest form possible: lots of cash on company balance sheets. Japanese companies have been hoarding cash for 30 years after the traumatic experience of the bubble bursting in the early 1990’s. In a world of high corporate debt, more than half of Japanese companies have net cash on their balance sheet. 

In the latest of our Multi-Asset Master Classes, Matthew Lamb, CEO of Pacific AM and Will Bartleet, CIO/Portfolio Manager of Pacific Multi-Asset discuss how recent moves in the market have seen bond and equity markets falling in tandem. Although the recent fall has felt sudden, Will discusses the three risks that he identified last quarter that in fact have been building over the last six months. They also discuss market opportunities and how the Multi-Asset portfolios are positioned.  

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager 

The IMF loves Macro - now!
Why now?
Well to answer the question, we first need to look where we have been. 

Macro has generally suffered since the initial rapid response by Central Banks post the demise of Lehman’s a decade ago. This is primarily because interest rate policy has been stagnant ever since, driving volatility of market rates to record lows. There were a few blips such as the Bernanke taper tantrum, Italy and Greece Euro crisis. But these were sell volatility events. This benign status quo has changed.