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.
Australian sharemarket pulls back
Markets weaken, Webjet raises $250m, lithium jumps as production ramps up
The ASX200 (ASX:XJO) fell 0.3% to begin the week, struggling to overcome a weak overseas lead with a lack of material announcements for the local market.
All eyes were on Federal Reserve Chair Jerome Powell’s 60 Minutes interview overnight in which he highlighted that the US economy is at an ‘inflection point’.
He noted economic growth and hiring are set to accelerate, whilst flagging that new surges in COVID-19 had the potential to impede the recovery. This comes as states including Michigan report record case numbers.
Communications and healthcare were the key contributors, adding 0.7% each behind a resurgent Telstra (ASX:TLS), 1.8% higher, and CSL (ASX:CSL), which added 0.8%.
This wasn’t enough to overcome weakness in the real estate and materials sector, both falling 1.2% behind Vicinity (ASX:VCX) and BHP (ASX:BHP), down 1% and 1.5% respectively.
Lithium miners were among the leaders, with Galaxy Resources (ASX:GXY) adding 4.7% after confirming production had returned to its capacity at the Mt Cattlin mine.
Plenti loan book expands, Santos CEO bonus, Cooper Energy extends APA deal
Struggling online travel booking agency Webjet (ASX:WEB) has gone cap in hand to investors again, delivering a $250 million convertible note issue held to refinance other impending maturities; this comes after a significant raise during the pandemic.
Cooper Energy (ASX:COE) has used the option to extend its agreement with APA Group (ASX:APA) concerning the sale and throughput of gas at its Orbost plan, shares remained flat despite the news.
Fintech personal lender Plenti (ASX:PLT) jumped 12% after announcing record loan originations of $172.4 million for the final quarter; 120% above the corresponding period; March originations are growing at 174%.
The company lends to credit worthy borrowers for assets including solar panels, automotive, and other personal loans, with net losses below 1% and 90+ day arrears falling to 0.31% in the quarter. The total loan book now exceeds $600 million with continued support for the funding program from institutions.
US markets weaken, record fine for Alibaba, Intel faces competition, Microsoft expands healthcare presence
US markets finished lower across the board as the slow start to the second quarter continued. The S&P500 ended flat with the Nasdaq falling 0.4% and the Dow Jones, 0.2%.
This week sees another quarter of reporting season, but today’s news is more company specific.
E-commerce giant Alibaba (NYSE:BABA) shares finished 9.1% higher after the Chinese regulator announced a US$2.8 billion fine for antitrust or anti-competitive activities.
This stands out as one of the largest in the world with management nearly thanking the regulator for effectively rubber stamping their business.
Microsoft (NYSE:MSFT) announced an expansion into healthcare, buying ‘conversational artificial intelligence leader’ Nuance for US$19.6 billion. The company’s operations focus on delivering more efficiency clinical services by leveraging the Microsoft Cloud.
Intel Corp (NYSE:INTC) is facing more pressure from global leader NVIDIA (NYSE:NVDA) who announced they were pushing into the supply of microprocessors, which have been the core or Intel’s dominance.
