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Don’t bank on a recession just yet: Morningstar CIO



Dan Kemp, the global chief investment officer of Morningstar, has downplayed concerns of a global economic slowdown resulting from ongoing central bank tightening

Kemp warns institutional investors against focusing on a single scenario in a volatile market, in a recent interview with Investment Magazine, emphasising that trying to predict the future based on a single theme or narrative is a risky strategy.

Instead, he suggests building portfolios that can withstand a range of outcomes, including recessions, growth environments, and inflationary conditions.

“People see comments or news about an expected recession and the temptation is to position a portfolio for one particular macroeconomic environment,” he says.

“The danger is that if you focus on a narrative, you lose sight of valuation, so you can end up overpaying for a particular theme, whether that’s economic or technological or anything else that people are starting to get excited about.”

“Once a particular scenario is prominent in the minds of investors, it’s likely to be priced in and then you’re unlikely to get any benefits from acquiring those assets.”

The tightening policies of central banks, aimed at curbing persistently high inflation, have raised worries among investors that further rate hikes could push major economies into a prolonged recession.

This has posed challenges for professional investors who traditionally relied on index-like exposures or 60/40 equity-bond portfolios but are struggling to generate good returns amidst volatile equities and rising bond yields.

According to data from the Australian Prudential Regulation Authority, superannuation funds in Australia recorded negative annual returns of -5.5% in 2022, with one in five investment options generating returns below their benchmarks.

Kemp, who oversees $265 billion in assets through Morningstar’s investment management subsidiary, acknowledges that professional managers are susceptible to cognitive biases just like individual investors.

However, they have a better understanding and ability to overcome these biases. One such bias has been investors’ willingness to overpay for certain assets, such as energy or technology stocks.

Morningstar, which was optimistic about energy companies in 2020 when they were priced for low energy prices, has been reducing its holdings in the sector as values now reflect inflation and high energy prices.

In the current scenario, it is important to consider how inflation is impacting profit margins. While inflation has historically eroded profit margins as companies struggled to pass on higher wages and input costs, the current situation has been different.

“What we’ve seen in this cycle is fascinating. Inflation seems to be supporting some profit margins, particularly in US equities, because they’re able to pass on price increases to customers who are expecting price increases because of that background level of inflation,” he says.

Some asset classes traditionally used for inflation protection are already priced so high that investors need to be cautious about the sustainability of margins in the future.

Morningstar is finding fewer opportunities at the industry or sector level and is increasingly favouring country-based investments, such as in Brazil, South Korea, China, and Germany.

Kemp does not see many opportunities in the Australian market, attributing the underperformance of the benchmark ASX 200 index, which has only gained 3.6% for the year, to the dominance of materials and financial stocks.

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Diversifying and enhancing payment methods



American Express reveals Australian homeowner bill payment insights

In response to the growing trend of card and tap-and-go payments, organisations are adapting their systems to accommodate diverse payment options.

American Express recently conducted research shedding light on homeowner sentiments towards local councils, with a focus on Australian attitudes and behaviours related to bill payments.

Vice President and General Manager of Global merchant services at American Express, Robert Tedesco, provides his insights.

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Explosive growth and dominance of the audio industry



Global radio market hits staggering $143 billion valuation, cementing audio industry’s dominance

The audio industry continues to assert itself as a formidable force, with the 2023 global radio market reaching a substantial value of $143 billion.

The podcast market has surged to an impressive worth of $18.52 billion, showcasing a compound annual growth rate of 27.6%.

Tony Simmons, CEO and founder of Sonnant, discusses how the audio industry can be made even better.

Presented by VentureCrowd – To find out more about Conscious Investing, head to

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Nick Kyrgios shocks fans with surprise OnlyFans announcement



Tennis sensation Nick Kyrgios sent shockwaves through the sports and entertainment world today as he revealed a surprising career move.

The Australian athlete, known for his fiery on-court antics and charismatic personality, has announced his entry into the world of OnlyFans, a platform typically associated with adult content creators.

In an unexpected turn of events, Kyrgios took to social media to share the news with his followers. He stated, “I’ve always enjoyed pushing boundaries and breaking the mold. I’m excited to announce that I’ll be joining OnlyFans to share exclusive content and connect with my fans in a new way.”

The announcement has left fans and pundits alike wondering what kind of content Kyrgios will be sharing on the platform.

The decision has sparked a debate about the intersection of sports and social media, as well as the evolving landscape of content creation.

Some fans are eagerly anticipating behind-the-scenes glimpses of Kyrgios’s life, while others are questioning the potential impact on his professional tennis career.

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