6 opportunities for Australian income investors

Welcome to the Goldilocks era for income, where a good quality term deposit can pay 5%, an investment grade corporate bond can net you 7-8%, and the hottest trade in town (private credit) is now aiming for upwards of 10% yield. Sure, NVIDIA might be the hottest growth trade in town but there are plenty more opportunities for income investors across asset classes. No longer are rates in the basement and stocks the only place to earn solid yield.
In fact, speaking of stocks, the ASX 200's benchmark dividend yield is now just 3.9% which is a long way from its long-run average of 4.6%. The fall in dividend yields can be attributed to two things - one, prices are expanding and outpacing dividend payouts (which also shows up in the ASX 200's P/E ratio) and two, the biggest dividend payers (the Big Banks and Big Miners) are experiencing an aggregate fall in profits, leading to smaller dividend payouts as well.
But is the fall in aggregate dividend yield a negative signal to get out of stocks? Not according to this month's Signal or Noise panel.
In fact, our panel argue that this is an opportunity for an intelligent investor to find some out-of-consensus income ideas. In addition, now may present an opportune time to move into different kinds of income-paying assets as the cycle changes and the narrative moves from prolonged high rates towards rate cuts.
Joining us for an in-depth conversation about the intersection of macro and income investing are three of Australia's most experienced investors Michael Price, Portfolio Manager for the Ausbil Active Dividend Income - Wholesale Fund, Amy Xie Patrick, Head of Income Strategies at Pendal, and Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP.
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[@hotchinahk]

I am richer already after listening all the good advice, thank you so much 🙂

[@wapphigh5250]

Shane and Amy spot on. Rates are coming down! Just MO!!! No advice!

[@petargatic7086]

Brilliant Session !! Keep them coming!

[@ceeps460]

Great discussion. Fantastic panel. Hans is a great host

[@Livewiremarkets]

You're very kind, thank you :)

[@tonymar4772]

Hans Lee - great presentation. What was the actual name of the Collibah fund you used for benchmark? There seemed to be two funds with similar names on their websites.

[@Livewiremarkets]

Hi! The name is the Coolabah Smarter Money Long-Short Credit Fund. The data was timestamped as of the end of May so you may see an updated figure on their website - coolabahcapital.com/wp-content/uploads/2020/08/performance-report-smarter-money-long-short-credit-fund-d.html Best, Hans