Crowe Horwath releases investment report: Six Pillars of new normal investing

Crowe Horwath, part of Findex, has publicly outlined its investment strategy designed to maximise client portfolio performance in the foreseeable investment landscape which they are describing as the 'new normal'.

The characteristics of the 'new normal', says Kieran Canavan, Findex Chief Investment Officer and Vice Chairman of the Investment Committee which provides guidance for all Crowe Horwath advisors, are 'low interest rates, low growth and high volatility'.

The article below is taken from Financial Standard and discusses this strategy in further detail.

Australian investors must consider low interest rates, low growth and high volatility as the 'new normal' when constructing their investment strategies, according to Findex.

The asset manager argues that in a landscape of low yield and high volatility investors must look to pursue a balanced approach to their investments, with a skilled manager and appropriate risk management imperative to achieving returns in such an environment.

Findex chief investment officer and vice chairman of the investment committee, Kieran Canavan said: 'The ongoing low interest rate environment is causing a realisation that returns enjoyed over the last five years, particularly equity returns up to the end of 2014, are unlikely to be sustained.

'Strategically, we don't believe client value-add originates largely from superior stock collection.

'Rather, we believe that it is critical to maintain a balanced approach to adding value that includes a number of key drivers.

'This includes determining the appropriate mix of growth and defensive assets and altering the mix or composition of these assets both on a strategic (5 year) forward looking and on a tactical (3 month) forward looking basis.

'It also includes selecting good managers who have superior stock selection ability, managing risks through effective portfolio construction, and delivering cost effective solutions to the end investor,' said Canavan.

Stefano Cavagila, Findex head of investment research noted international equities, property and infrastructure investments as some of the pillars Findex identified as having the potential to drive performance in the 'new normal'.

'International equities provide a wide range of growth opportunities and offer strong diversification benefits that impact an investor's wealth accumulation strategy,' said Cavagila.

'The resilient yield component of Property and Infrastructure investments makes them a valuable asset in these turbulent markets. Additionally, absolute return strategies that are largely driven by manager kill should perform well under any environment.'

View the published article online here.