TOL - 20th Jun, 2024
Why investors need to understand real returns
And how Talaria Asset Management delivers investors income no matter the economic cycle.
Note: This interview was recorded on Tuesday 28 May 2024.
Timecodes:
- 0:00 - Intro
- 0:19 - How Talaria is generating income today
- 1:31 - Put options for income explained
- 2:27 - Why volatility is currently low
- 3:11 - Impacts of volatility on Talaria's strategy
- 3:52 - The Funds' strongest performers
- 5:04 - How the Fund has performed recently
- 5:38 - Where the Fund fits in a portfolio
We're currently in a Goldilocks era for income. This means it's easier than it has been for quite some time for investors to get a comfortable return on their cash in their bank accounts, on term deposits, and lock in some exciting yields in fixed income.
Unfortunately, however, inflation remains higher than investors would like. Central banks' targets are typically between 2-3%. In Australia, for example, inflation is currently tracking at 3.6%.
This means investors' real return - what they are left with after inflation eats into the return of their investments, is far lower than headline yield figures of funds or on that term deposit would have you believe.
"Even though interest rates have risen, the real return you're getting actually hasn't moved that much. It's probably only about 1% at the moment," Talaria Asset Management's Chad Padowitz explains.
For this reason, Padowitz believes it's never been so important for investors to think about real returns - and to generate income and capital gain from differentiated sources in their portfolios.
"We look at capital gains from the shares we want to buy. Our implementation process generates north of 7% a year. So we have a combination of multiple sources of return, less reliant on dividends, less reliant on interest rates, and less reliant on the economic environment," he says.
In this Fund in Focus, Padowitz outlines what makes Talaria's Global Equity Strategy so unique, explains the impacts of volatility on the Talaria Global Equity Fund's (Managed Fund) returns, and shares some of the stocks that have helped the strategy deliver 7.31% in annual returns since its inception.
ETF
Talaria Global Equity Fund (Managed Fund) (TLRA)
Global Shares
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Managed Fund
Talaria Global Equity Fund
Global Shares
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For over 18 years, the Talaria Global Equity Fund (Managed Fund) has been delivering a greater certainty of returns through its unique and alternative approach to global equity investing, with 8.65% p.a. average income distribution for the last 10 years, low volatility and low drawdowns.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian Group, Your Money, Sky Business and Sky News.
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4 topics
1 stock mentioned
2 funds mentioned
1 contributor mentioned
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
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