{"id":3081,"date":"2016-08-15T07:26:54","date_gmt":"2016-08-15T07:26:54","guid":{"rendered":"https:\/\/raizinvest.com.au\/investors\/search-for-yield-pays-dividends-for-aussie\/"},"modified":"2019-02-01T03:43:49","modified_gmt":"2019-02-01T03:43:49","slug":"search-for-yield-pays-dividends-for-aussie","status":"publish","type":"post","link":"https:\/\/raizinvest.com.au\/investors\/blog\/search-for-yield-pays-dividends-for-aussie\/","title":{"rendered":"Search for yield pays dividends for Aussie equities and currency"},"content":{"rendered":"
\"image\"<\/figure>\n

 <\/p>\n

As
\nwe enter the 3rd<\/span><\/sup>\u00a0week of August,
\nthe Northern Hemisphere is on holiday and it is no surprise that the markets
\nare confounding investor expectations, as they are meant to do in August.<\/p>\n

In
\nthe current low interest rate environment, it is all about yield!<\/p>\n

Yield
\nis the income return on an investment, such as interest, a bond coupon, or a
\ndividend from and equity investment<\/i>.<\/p>\n

Negative
\nyield in debt means that the holder of a bond\u00a0loses money on their
\ninvestment.\u00a0<\/b>With the amount of debt in\u00a0negative<\/b>\u00a0yield
\nnow at a staggering $13tn, it is no wonder that the main driving force for
\nequities will be the global hunt for yield. Which in turn is seeing increased
\ninvestment into the local Aussie market.<\/p>\n

Thanks
\nto years of continued investor activism, top Australian companies pay higher
\ndividends and help produce one of the highest yielding markets in the world.
\nCompared to the S&P 500, which yields about 2.3%, the yield from ASX 200
\ncompanies is attractive, resulting in foreign inflows and leading Australian
\ncompanies being included in global yield ETFs listed in the US.<\/p>\n

\u2026and
\nit\u2019s not just equity yield that is attractive in Australia, with AAA-rated
\ngovernment bonds producing significant yield when compared to negative yields
\nyou would receive from both countries and corporates with lower ratings.<\/p>\n

Foreign
\ninvestment in the Australian market are also having an effect on the Aussie
\ndollar, which is on the rise despite the RBA cutting rates to record lows in
\nAugust. This rise in the dollar, coupled with mortgage lenders not passing on
\nthe full rate cut to borrowers, has seen the RBAs recent decision completely
\nwasted. If it is a weakening in the dollar that the RBA are interested in, then
\nthey may think twice about cutting again.<\/p>\n

Investors
\nwill be keeping a keen eye on the Australian employment report this week for an
\nindication to the strength of the economy!<\/p>\n

Important<\/strong>
\nNote: The information is general advice and does not take into account any
\nperson\u2019s particular investment objectives, financial situation or investment
\nneeds. If you are an investor, you should consult your licensed adviser before
\nacting on any information contained in this website.<\/i><\/p>\n

Investors
\nonly: The information in this Document is confidential it must not be
\nreproduced, distributed or disclosed to any other person unless it is part of their
\nstatement of advice. The information may be based on assumptions or market
\nconditions and may change without notice. This may impact the accuracy of the
\ninformation. In no circumstances is the information in this Document to be used
\nby, or presented to, a person for the purposes of making a decision about a
\nfinancial product or class of products.<\/i><\/p>\n

General
\nadvice warning: The information contained in this Document is general
\ninformation only. It has been prepared without taking account any potential
\ninvestors\u2019 financial situation, objectives or needs and the appropriateness of
\nthis information needs to be considered in that context. No responsibility or
\nliability is accepted by Instreet or any third party who has contributed to
\nthis Document for any of the information contained herein or for any action
\ntaken by you or any of your officers, employees, agents or associates.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

  As we enter the 3rd\u00a0week of August, the Northern Hemisphere is on holiday and it is no surprise that the markets are confounding investor expectations, as they are meant to do in August. In the current low interest rate environment, it is all about yield! Yield is the income return on an investment, such […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[],"yst_prominent_words":[619,1392,159,1177,1030,590,332,386,756,151,940,302,314,740,949,289,290,365,1393,1391]}