Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Tech sector runs red as ASX retreats
ASX hit as US rattled, Boral takeover offer, Rex clarifies misstatement
The ASX200 (ASX:XJO) followed a global lead lower, falling 1.1% at the open and remaining in negative territory throughout the day.
The IT sector was the hardest hit, falling 4.2%, and acting very much like a leveraged proxy for the US Nasdaq index.
The key detractors were Afterpay (ASX:APT) and Zip Co (ASX:Z1P) which fell 8.7% and 9.1% respectively.
The only highlight was the consumer staples sector, which managed a 0.3% gain as Woolworths (ASX:WOW) released the independent assessment of its decision to demerge the liquor and hotels business, which sent shares 1.1% higher.
Seven Group Holdings (ASX:SVW) has lobbed a long-awaited bid for all the shares in Boral Ltd (ASX:BLD) for $6.50, representing no premium to the current share price.
Reports suggest that SVW is simply seeking to grow their holding to 30% but under takeover law are required to lodge a formal bid once their shareholding exceeds 19.9%, which it has been for some time.
The board did not recommend accepting the offer, with traders clearly expecting another bidder as shares rose 3.4% on the news.
Dexus swallowing APN, Calix and Pilbara make another lithium deal
Corporate activity in the property sector continues to gather steam, with Dexus (ASX:DXS) agreeing to buy APN Property Group (ASX:APD) for $320 million or 91.5 cents per share. This represented a significant premium to the latest traded price, sending shares 47.5% higher.
The group managed some $2.9 billion in assets spread across listed REITS and unlisted funds which include industrial and convenience style assets.
Calix (ASX:CLX) and Pilbara Minerals (ASX:PLS) have agreed to undertake an assessment for the co-development of a midstream lithium chemical refinery, leveraging CLX’s unique, homegrown technology. Ultimately, the joint venture aims to produce a specialised lithium sale for direct use in batteries.
Regional Express (ASX:REX) corrected what appeared to be a major oversight in yesterday’s market update, confirming that capacity was 35% off pre-COVID levels, not 35% of pre-COVID levels. Shares fell 0.8%.
Dow tanks nearly 500 points, Nasdaq pares losses, dip buyers emerge, inflation in focus
The obsessive focus on the threat of inflation continues to drive markets, with the Dow Jones tanking 476 points, or 1.4%, dragged lower by the energy, financial, and industrial sectors.
This marked the second straight day of losses but the Nasdaq was able to recover to be down just 0.1% as buyers emerged.
The selloff came after ex-New York Fed Chair William Dudley suggested higher short-term rates would be required far sooner than expected.
As highlight previously, sustained inflation will require the economy to be nearing productive capacity, rather than just the flow through of price increases as pandemic era supply chains begin to recover.
The Trade Desk (NYSE:TTD) in which I own shares, dropped over 25% despite reporting revenue growth and forecasts that exceeded expectations for their programmatic advertising business; investors were clearly expecting more.
Tesla (NYSE:TSLA) also fell 1.9% after reporting a fall in car sales in China, which were down 27% in March, reaching just 25,845 as domestic players continued to gain market share.
