Article of the Future Fund CEO in the AFR this WE.
Main elements :
- the return of geopolitical risk requires to change our strategy as investors,
- need to build flexible and liquid portfolios,
- better to get back to active management (vs index funds), as "geopolitical risk increase the dispersion of returns across asset classes, currencies and geographies",
- it also wants to invest more in Australia as the risk premium overseas is increasing,
- all the main trends are inflationary (supply chain change, fiscal stimulus, war and funding deficit), so the focus for the Future Fund is "to make portfolios more inflation resilient".
I find this strategy quite convincing.
It also reminds me with Rajiv Jain is trying to do with GQG.
Just not sure what we need to do to make portfolios more inflation proof.
I guess it means to buy stocks which have a high level of pricing power (while such a scenario still seems quite positive for resources).
Some sectors which looks inflation proof to me : tech, luxury, utilities/infrastructure (when there is an indexation clause).
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