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True Bearing Edition 3: March 2017

Global Outlook & Strategy #64 (Published February 2017)
At Providence we are vigilant and watch developments within investment markets keenly to identify opportunities  for our clients.  Each Quarter, we publish our review of investments and asset classes. 

Our latest issue is titled "Heightened Risk: Patience and Diversification the Key". 

Key Points:

  • Central Banks openly acknowledge that monetary policy has run its course and fiscal policy is the future pathway
  • Deflation appears to be on hold, reflation is now the focus
  • Some signs of a pickup in global growth
  • A lot has been priced in quickly; we expect a correction in markets
  • Valuations short term are stretched in our view

Access the complete Global Outlook & Stategy #64 here.

You can also watch this short video of Grant Patterson -  Managing Director, sharing the key messages of the Global Outlook and Strategy in this video.

Providence Whitepaper: Lower Longer Term Returns

Our recently published Whitepaper contends that long term investment returns from a traditional balanced portfolio are likely to be structurally lower than has been the experience over the past 30 years. Without adjusting return expectations, a more aggressive investment stance would be required to meet previous aspirational goals. The primary drivers behind this conclusion are due to multiple and parallel global imbalances creating headwinds over the longer term, being: 

  • Demographic changes 
  • Income inequality 
  • Excessive debt levels

These structural headwinds feed into the increasing prospect of a sustained period of low inflation and hence low cash and bond yields. As these factors are all interrelated and key inputs to other asset class valuations, the flow-on effects are likely to result in lower returns from all asset classes going forward. 

Investors previously seeking returns of 4.5 – 5.5% above CPI for the purpose of meeting actuarial schedules, contractual liabilities or mandatory annual distributions will have to either adjust aspirational goals and income requirements or take on a higher level of risk to meet investment returns. We have worked closely with our asset consultant, Heuristic Investments, to calculate expected returns and drawn on multiple industry references to form our views. It is important to note that an event that results in sudden revaluation of any of these factors would change the outlook and hence our view on long-term asset class returns. The valuation starting point of assets is paramount in determining long-term returns on the assumption of mean reversion.

Click here to access the complete Whitepaper: Lower Longer Term Returns

Quarterly Activity Report: Quarter 4, 2016
Providence reviews a number of products each month, searching for investment opportunities that fit our clients' individual requirements. Being an independent company, each opportunity is assessed solely on its merits regarding risk and return. We share the basis of our decisions with our clients in this Quarterly Activity Report

Providence Gains Global Insight from London 

Providence has appointed Will Porter to the newly created role of Global Research Manager based in London, in order to broaden research insight.

Having access to global fund managers in London, Will Porter will be delivering insights on global themes in asset allocation and investment markets to Providence’s Australian-based investment committee and executive team, for the benefit of Providence’s clients.

Will Porter has over ten years’ experience in the investment market, most recently as Providence’s Sydney-based Australian Equities Manager. He has had responsibility for equity research and asset classes, maintaining model equity portfolios and monitoring investment performance.

Grant Patterson, Managing Director of Providence explained the importance of this new London-based role. “These are uniquely uncertain economic times. At Providence we pride ourselves on providing expert and truly independent investment management and advice to our clients. We believe that Will’s presence in London will enhance our ability to safely navigate these uncertain times on behalf of our clients, in a global context.”
Providence Philanthropic Foundation
We have established the Providence Philanthropic Foundation to facilitate planned and professional charitable giving. We welcome both existing clients and new clients to join us on our endeavour towards sustainable support for charities. Click here to learn more.
For more information phone (02) 9239 9333 or (03) 9653 6406 
Providence is an independently owned and operated investment advisory group.
ABN 42 003 224 904 | AFSL 245643
DISCLAIMER: Providence Wealth Advisory Group (AFSL 245643) has made every effort to ensure that the information in this report is accurate, however its accuracy, reliability or completeness is not guaranteed. Although consideration has been given as to the appropriateness of information to the recipient, no warranty is made to the accuracy or reliability of neither the information contained nor the specific recommendation for the recipient. Providence Wealth Advisory Group, its subsidiaries, affiliates or employees may have interests in securities or investment opportunities mentioned in this report. This document should only be read by the intended recipients. Providence Wealth Advisory Group, and its employees, disclaims all liability and responsibility for any direct or indirect loss or damage, which may be suffered by the recipient through relying on anything contained or omitted in this report and/or its recommendations.

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Providence Wealth Advisory Group · Level 9, 20 Martin Place · Sydney, Nsw 2000 · Australia

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