'Perspectives' by Escala Partners

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, discusses how this market correction differs to anything in the past; what the Escala fund managers are saying about it; and why the investment environment will be different when the fog finally lifts. (1:05) Tracey lets start with how you are viewing current events in markets? (3:19) You mentioned the similarities with covid in terms of uncertainty of what comes next. How do you compare the market reaction this time to previous sell offs? (5:47) You have just come off heat week where you talk to all of our managers, what are they saying? (8:32) How have fund managers adjusted their portfolio's? (10:46) How have you and the team adjusted portfolio's? (14:42) But you think the best way to approach this is through tactical asset allocation? (16:02) What about the currency? The Aussie dollar has fallen a long way. Should clients be hedged against the USD?  

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, discusses the seismic shift in German defence spending, why Greek banks are looking attractive and why the team are no longer happy to be overweight US equities. (1:10) Tracey for decades, Germany has been the poster child of fiscal conservatism in Europe. The country's approach was shaped by its post-WWII economic memory, where inflation and debt were deeply stigmatized. The past few weeks has seen a seismic shift in that view. (1:55) It was a historic shift in Germany's fiscal policy. (2:49) Still, it means some significant government spending in Germany. What does it say about NATO? (3:51) So is this another cold War? (4:27) The Australian Government brought down its budget last week. Did defence spending get a boost? (5:21) Let's turn to trade policy—specifically tariffs. Today is Liberation Day – the day the Trump administration is expected to announce the most aggressive pivot in U.S. trade policy in decades. There's been a lot of headline noise, but break it down for us: how are U.S. companies actually being affected on the ground? (6:15) That's massive. What are companies doing in response? (7:49) So even “Made in America” isn't immune? The idea of a 100% "Made in America" car does not exist. (9:19) What about everyday consumer brands? (10:07) So inflation is coming back through the trade channel? (10:30) What about smaller companies? How is all of this affecting them? (11:47) So what are the smart companies doing right now? (13:32) That's a pretty tough landscape. Are there sectors that are less affected by these tariffs -maybe even thriving? (14:48) What are some other examples of more resilient sectors? (15:36) So it is the defensive sectors plus financials and real assets that will likely be the most insulated – at least in a relative sense. The countries whose equity indexes are highest in these sectors are the UK, Europe and Australia. (15:56) That brings us to an important decision that came out of our investment committee last week. You've announced the closure of your overweight position in US equities relative to Australian equities. Walk us through this decision? (16:48) That sounds logical. So what changed? (17:38) Tariff induced inflation pressures may prevent the US Federal Reserve cutting interest rates as much as expected. Further undermining the case for US equities. (17:58) Tracey it's clear we're navigating a period of substantial global change. What advice would give to investors right now?

In this episode, Escala Partners Investment Analyst Stephen Dickinson talks to Sam Edwards, Partner from Longreach Alternatives. Sam discusses the royalties landscape, why a diversified approach to royalty investing is important and the benefits of PG3s multi-sector approach to royalties.

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, discusses what a multi-polar world might look like, NATO's fragile state and how the world trade map is being re-drawn. (1:30) It has been easy to get stuck in the weeds over the past 57 days, since President Trumps inauguration, so lets take a helicopter view and talk about US exceptionalism. For decades, the US has been the dominant force in global politics, economics, and military power. But today, we're seeing cracks in that dominance. How do you see this playing out? (3:08) Interesting. And politically, are we seeing a decline in soft power? (4:05) So, does this mean the US has reached peak superpower status? (4:31) What does this multipolar world look like? (8:10) Okay, so we have these competing power centres. What does that mean for global stability and for investors in general? (10:44) So what's your biggest takeaway about the multipolar world we're entering? (11:35) Its truly fascinating. The shift from a unipolar to a multipolar world is one of the biggest geopolitical changes of our time, and it's happening faster than most people realize. (11:46) That brings us to NATO. The alliance that defined the Cold War and kept the West united for so long through so many challenging times - could we really be seeing its end? Gerard Minack, our Independent Investment Committee member said it is not dead yet but it is on life support. (12:50) But hasn't NATO expanded recently? Finland and Sweden are joining—doesn't that strengthen the alliance? (13:31) So, if NATO were to dissolve or become irrelevant, what would the world look like? What would take its place? (14:51) Alright, let's shift our focus to something that affects not just governments and corporations but everyday people - the ongoing tariff and trade war. This conflict is now reshaping global supply chains in profound ways. We've seen waves of tariffs, retaliatory measures, and efforts to decouple economies. How is this reshaping global trade, and what does it mean for businesses and consumers? (17:20) Okay, so tariffs didn't quite work as planned. But how did they affect global supply chains? (18:27) With this new reality taking shape, who are the winners and losers?

In this episode, Escala Partners Investment Analyst David Bruty talks to Justin O'Brien, Portfolio Manager of the Cooper Investors Brunswick Fund, an all-cap Australian equities fund. Justin discusses the investment philosophy that underpins Cooper Investors' approach to managing capital, the differentiated and unconstrained structure of the Brunswick Fund, along with a number of stock examples and the role they play within the portfolio.

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, interviews Mark Middleton, CEO of Icon Group. Mark discusses his journey as a founder of one of Australia's largest health organisations, his partnership with private equity and the importance of authenticity as a leadership quality. Mark is the author of 'Good Morning', with all proceeds going to the Icon Cancer Foundation, a registered charity dedicated to providing hope, access and opportunity to people with cancer through supporting research and clinical trials. Find out more: Good Morning: How a crisis delivered inspiration to lead — Icon Group   

Live on stage at our Agenda 2025 client event, Escala Partners CIO, Tracey McNaughton, is in discussion with Gerard Minack from Minack Advisers. Tracey and Gerard discuss prospects for Europe following the German election, implications of a peace deal between Ukraine and Russia, what the trade war means for growth and inflation and why Australia is so hard to love right now.

This week Escala Partners CIO, Tracey McNaughton, reflects on what has been a blistering start to the year. President Trump is setting records with the number of executive orders he creates; tariffs are creating uncertainty and DeepSeek is disrupting. It's enough to make your AI Agent's head spin. (1:03) Tracey, we're 18 days into the new US administration and no fewer than 48 executive orders have been issued. That has to be a record, doesn't it? (1:46) Tracey, occupying a lot of the market's attention at the moment is tariffs, and so far few of the threats have actually been implemented with tariffs on Mexico and Canada delayed for a month. Although the 10% tariff on China came into effect on Tuesday this week. But how are you thinking about this, and how impactful will it be? (3:56) Tracey, is it physically possible for all this manufacturing to come back on shore in the US? (6:03) Tracey, still a lot of unknowns with regards to tariffs. So let's move on to something slightly more certain. It's AI – and why is this Chinese company ‘DeepSeek' in the news so much? (7:56) Tracey, what does this mean for investors? (11:23) So, Tracey, we've spoken about this on our morning meetings. But what kind of AI applications are we talking about, and how will they make money for the user? (15:27) Tracey, you mentioned earlier Agentic AI? Now, what is that? And is it the next big thing? 

In this episode, Escala Partners Investment Analyst Stephen Dickinson talks to Craig Balenzuela, Managing Director within Goldman Sachs Asset Management Alternatives and Private Markets Client Solution Group. Craig discusses the growth in the private credit landscape, the implications of the changing macro environment for private credit and why not all private credit is made equally.

In this episode, Investment Analyst Darragh Kennelly talks to James Tsinidis of Munro Partners to discuss the role of nuclear power in the energy transition and the growing demand for reliable baseload power especially from some of the worlds largest tech companies. They also discussed the benefits of nuclear power and the key components of the nuclear sector to consider. Important Information The information contained in this podcast reflects, as of the date of publication, the views of Munro Partners and sources believed by Munro Partners to be reliable. There can be no guarantee that any projection, forecast or opinion in these materials will be realised. The views expressed in this podcast may change at any time after the date of issue.

This week Escala Partners CIO, Tracey McNaughton, reflects on playing the long game with Carol Geremia, President of MFS Investment Management. Passive investing has gone from 6 to 60% in the past 30 years. Investment horizons have fallen from 5 years to 5 months. What are the consequences for investors, fund managers and corporations alike? And what is the one thing a good leader must have?

This week Escala Partners CIO, Tracey McNaughton, discusses the implications of the US presidential election including the need for governments to open their wallets even more – ‘spend baby spend'. (0:56) The US election result is in. Probably the biggest surprise was how convincing a win for Trump it was. (3:07) The market reaction to the election result was pretty dramatic. Bitcoin has hit a new all-time high and DOGEcoin is up 150% since Elon Musk was named to help lead the new Department of Government Efficiency or DOGE for short. (7:19) That is a long list of winners. Where are the losers under a Trump administration? (8:47) During his term, Biden passed a number of pieces of legislation that we have talked a lot about on this podcast – the Inflation Reduction Act, the Chips Act and the Infrastructure Bill. All three were worth $1.6 trillion. What are the chances of Trump repealing some of this? (10:10) What does the US election mean for the Australian economy? (11:54) Another election to take place next year will be in Germany. The German government effectively collapsed on the day of the Trump election. (14:14) How will a Trump presidency affect monetary policy? (16:34) There has been a lot of talk about households facing an affordability crisis. What about governments? Governments everywhere it seems are sinking deeper and deeper into debt.

This week Escala Partners CIO, Tracey McNaughton, discusses the upcoming US presidential election, why the polls are often wrong, the bi-partisan support for nuclear energy, and why the bond and equity markets disagree on what a Trump presidency could mean. (0:57) Tracey, we are devoting this entire podcast to the US election given its importance. It's been quite a journey so far – two assassination attempts, the last minute withdrawal of Biden, the late entry by Harris. So far though, neither candidate has been able to land a knockout punch. (2:54) What are your thoughts on the outcome on November 5? What are the polls saying? (6:26) Why are the polls so often poor predictors of the outcome? (8:20) We have had quite a bit of volatility recently in markets. How are investors positioned for the election? (9:42) The betting market you are referring to there I take it is Polymarket? (12:04) On the issue of energy, the topic of nuclear power has come up again recently. (13:37) Given its importance but also controversy, how do each of the presidential candidates stand on nuclear? (14:58) Another issue is trade restrictions. You have talked in the past about the Biden Administration being more America first than any other administration before it. Will Harris continue that legacy?

In this episode, Escala Partners Investment Analyst Stephen Dickinson talks to Andrew Ballantyne, Head of Australasia Research for JLL. Andrew discusses how JLL is currently viewing the office sector, some of the underlying structural drivers in the sector and the outlook ahead.

This week Escala Partners CIO, Tracey McNaughton, discusses how the US central bank overdelivered on interest rate cuts last week and why the Reserve Bank in Australia is under-delivering. (0:54) The Fed over-delivered in its first rate cut in four years lowering interest rates by half a percent last week. Such a sizeable rate cut is normally associated with a crisis. (4:27) It's not just the US. Europe also cut rates this month. (5:33) We had the Reserve Bank meeting today. Despite the Greens urging otherwise, they decided to keep interest rates unchanged at the 12-year high of 4.35%. (7:47) Speaking of China, the economy received some much needed support from policy makers today but will it be sufficient do you think? (12:16) Your mention of Japan is interesting there. Japanese companies are pulling back on spending in China. (14:17) We are getting a lot of questions from clients on the US debt situation and just where and how it ends. A related question - is there any relationship between rapidly rising government debt and gold prices? (17:27) The countdown to the US election is on – we are now 43 days out. How is the market positioning?

This week Escala Partners CIO, Tracey McNaughton, discusses the high price Australians are paying to the government for managing our economy and why we should probably be asking for a refund. (0:52) August has been a very volatile month. The start of September looks like it will be more of the same. How are you and the CIO team navigating these markets? (4:22) Do you expect this volatility to continue? (6:04) Another question that came up recently at a client lunch, Tracey, was around population growth. If declining population in places like China and Japan is bad, why isn't growing population in Australia good? (9:39) The other factor weighing on Australia is China. Did you see any evidence of this impact in the last GDP report released on Wednesday? (11:17) Earnings reporting season has just finished in Australia. Is this softer picture for Australia being reflected in company bottom lines? (12:59) How weak is China? (15:24) You saw Howard Marks in person last week – did you get any investment tips?

Loose on the bars. That is what Escala Partners CIO, Tracey McNaughton, is telling clients as they navigate the recent bout of financial market volatility. And every revolution leaves past corporate champions behind. Who will be left behind in the AI revolution? (0:56) Lets talk about the volatility in markets. How did we come to witness the largest 2-day fall in Japanese equities in history? (5:47) This is a reminder of how volatile public markets can be. Is this why we are seeing a rise in private market activity? (8:54) Tracey let's move onto the “catastrophic” earnings report from Intel a few weeks ago. Why is this so significant? (13:39) We need to spend some time talking about Australia today because it looks like we are on a slightly different path to the US. (16:10) The other factor important for Australia is what is happening in China. The news is not good there either.

In this episode, Escala Partners CIO, Tracey McNaughton, looks at what is driving recent market volatility - an election correction; a tech-check; or just a Fed-ache. The countdown clock has begun - what are the key battleground states in the US election? (0:52) Market volatility has picked up in the past few weeks, particularly since the July 11 release of the US inflation report. (5:42) Earnings season has begun in the US as you say. We are about halfway though. What are some of the themes you are picking up on so far? (12:21) This is a busy week for the market. What else have we got coming up? (15:52) Given all of the volatility, what are you telling clients? (19:02) The US Election is still 97 days away. What do you think is going to happen between now and then?

In this episode of The Fund Managers, Escala Investment Analyst, David Bruty, interviews Chris Prunty, Portfolio Manager of the QVG Opportunities Fund. Chris discusses the fund's recent participation in the highly-publicised initial public offering (IPO) of Guzman Y Gomez and the attractive characteristics of the company that provide the foundation for a strong runway of growth. The pair also discuss the outlook for small caps here in Australia following a recent rotation in the US that has been driven by the rising expectation of an easing in policy by the Fed.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about the payoff with artificial intelligence and whether the dizzying amounts being spent on semiconductors and infrastructure will be worth it. And what role do private markets play in finding genuine use cases of AI? (0:54) Well Tracey the big news in the past few days has been the shocking assassination attempt on former President Donald Trump. It's still early but what, if any, are the consequences? (3:28) If we did get a Trump win, what would be the impact on markets? (8:13) The other big event we had last week was the release of lower-than-expected inflation data out of the US. It now looks like we are going to get a rate cut sooner than expected. (11:21) Just on AI and the impact it is having on some parts of the equity market. Where do you think we are in terms of a peak? Are you in the camp of the optimists? (16:55) The other feature of the market that is different today compared to the late 1990s TMT boom is the prevalence of private equity. What role is private equity playing in the AI boom?

In this episode, Investment Analyst Darragh Kennelly, talks to Jess Cairns of Alphinity Investment Management and Qinghua Lu of CSIRO to discuss their recently released research report on the implications of artificial intelligence use by companies and investors. They outline the framework for investors to use when assessing key threats and opportunities of AI usage and highlight some interesting responsible AI case studies of large multinationals.

In this episode, Escala Partners CIO, Tracey McNaughton, and Escala Adviser Ed Brooke reflect back on the past 100 episodes since the Perspectives podcast began during covid in 2020. The past four years had it all - lockdowns, recessions, recoveries, bank runs, bank collapses, wars, uprisings, innovations, bubbles that burst, bubbles that inflated, elections that surprised, elections that divided. (0:20) A lot changed due to covid, and one of those changes at Escala was this podcast. Our first episode aired on March 18th 2020 and this marks our 100th podcast. Tracey, congratulations on your century. (1:07) Tracey, it's been a remarkable period. We seem to have jam packed multiple cycles and events in less than five years, let's start with some of your most memorable moments. (7:39) How about you, Ed? (10:15) Looking back, what's changed? (13:05) What do you think Ed, what's changed the most for you? (14:54) What about China, how has China changed? (16:28) Tracey, over the last 4.5 years, what surprised you the most? (17:33) What about you, Ed? (18:37) One thing that was real however, was emotions. They were heightened over this time - how did you keep calm and carry on? (19:13) What would be your "Stock of the Century"? Have to be Nvidia, wouldn't it? (20:46) I've got a question for you now, Ed. What has been your greatest learning over this period? (22:22) They're two of my key learnings, how about you Tracey? (24:05) We'll wrap things up there, thanks for your insights once again Tracey and of course for all your insights over the past 100 episodes. Let's hope it's smooth sailing now on your way to a double century.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about what she sees as the three main takeaways from the recent string of elections around the world. She and Ed talk about what Le Penn describes as the "return of nations", the rise of nationalism, and what it may mean for investors. (0:49) Tracey, let's start with the topic of the day, inflation. We had some key data out of the US. (1:56) The easing cycle has started for some though hasn't it. (3:17) Why is that? We had data out last week showing the economy barely growing and yet the expectation is the Reserve Bank will be one of the last to cut interest rates? (4:33) Elections have been another important topic. In the past couple of weeks we have had elections in Mexico, South Africa, India and Europe. What do you make of the results we have seen so far? (9:30) What are the investment implications emerging so far from these elections? (12:41) India is a market that you and the CIO team like a lot given its favourable demographics and it being one of the key beneficiaries of the rejigging of supply chains away from China. Does the election outcome change your view at all? (15:14) One of the reasons you and the team are less convicted on China is the changing shape of global supply chains - moving away from China. (17:05) So while China is still the manufacturer to the world, alternative manufacturing hubs are being established.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about the connection between community, political stability, and the size of government. We are now in an age of big government. This has implications for economic growth, inflation, and central bank independence. (0:55) Tracey, firstly, how was the ride last weekend? (1:16) I'm a cyclist but even I know you can't ride a motorcycle without a clutch. (4:24) We saw that with the budget a fortnight ago, didn't we? Government spending as a share of GDP has increased. (6:04) When did this shift toward protectionism start? Was it with the election of Trump in 2016? (8:21) What about Europe? Isn't Europe China's largest trading partner? (10:00) I suppose with so many countries going to the polls this year, the idea of placating disgruntled voters with election sweeteners puts even more pressure on government budgets. (11:53) We were talking in our Investment Committee meeting this week about why the US is so surprisingly resilient – even in the face of 11 interest rate hikes. Gerard put up a great chart that showed the relationship between increased government spending and higher economic growth. (14:22) Governments might be going their own way, but markets all seem to be going one way – and that's up. (16:14) Turning to Australia. We had the latest inflation data for the month of April yesterday. It came in a little hotter than expected. (18:00) We have also had some activity data recently that points to a weakening outlook here.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about AI and its energy demand; Biden's tariff hike on China; and why we should be a little sceptical of the this weeks' Federal Budget. (0:54) The latest Bank of America fund manager survey shows optimism in the stock market is at its highest level since November 2021. Investors are optimistic inflation will decrease and short-term interest rates will get cut. (3:04) Some big news overnight, apart from the Federal budget, was US President Biden's tariff announcement on goods coming in from China. (4:50) Why is all of this important? (7:42) We will get to the budget. You have just finished heat week with your fund managers. What were some of the themes? (9:51)Just on AI and energy – we have known for some time that AI consumes lots of energy. Why was it such as surprise to the market? (12:37) Speaking of inflation. Do you buy the Treasurer's view that injecting $9.5 billion into the economy is not inflationary? (15:12) How do you think the RBA will respond? (16:17) What about the Future Made in Australia initiatives? (18:46) So, I'm guessing, Tracey, this budget does nothing to change your view on investing in Australia?

In this episode, Escala Partners CIO, Tracey McNaughton, talks about riding the cycle – physically and metaphorically. In a world where there are so many distractions vying for investors' attention, how can investors “tape up their mirrors”? (0:57) Tracey, before we start, our clients have been asking for an update on your riding. You have been doing some training, I hear, on a racetrack. (3:35) So let's go there. The obvious distraction for investors at the moment is geopolitical risk. How are you guarding against that? (8:28) What is the data telling you at the moment? (9:48) Okay, so the risk that the US is going into recession has declined significantly, but what about earnings? We are about halfway through US earnings season. Are we at risk of an earnings recession? (12:36) We need to talk about AI Tracey. Let's talk about Apple. Apple continues to move extremely quietly in the AI world – we are really not hearing too much from them. An interesting feature of Apple's last earnings call was the absence of any mention of artificial intelligence. (16:43) Turning to Australia, we had a troubling inflation report last week. It told a similar story that we are hearing in other parts of the world, that service sector inflation remains sticky. Does this change your view on Australian equities?

In this episode, Investment Analyst Darragh Kennelly, talks to Nick Edgerton of Stewart Investors to discuss a key engagement initiative Stewart Investors have worked on since 2020 when they identified serious human rights risk that is often overlooked. Conflict minerals are vital materials for the semiconductor industry and are powering the green transition. The pair finally discuss recent examples of sustainable companies incorporating A.I. into their business practices.

Live on stage at our Agenda 2024 client event, Escala Partners CIO, Tracey McNaughton, is in discussion with Gerard Minack from Minack Advisers. Tracey and Gerard discuss interest rates, company earnings and the outlook for economic growth both domestically and overseas.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about why our investment conviction level is the highest it has been since 2021 and how this has transformed into an overweight position in global over Australian equities. And why is OpenAI CEO Sam Altman investing in fusion? (0:55) Tracey, we heard on your last podcast that you are a weekend road warrior on your motorcycle. Do you navigate markets in the same way you navigate roads? (3:27) It seems like the Investment Committee at Escala has become more convicted in recent weeks. The Committee are feeling more confident now than they have since 2021. What's driving that view? (5:39) One of our highest conviction views is a preference for US equities over Australia. What is that view based on? (8:00) The usual question remains on the lips of investors – is this a bubble? (11:26) Boston Consulting Group believes that AI and regular data centre demand will grow to 7% of total electricity demand by 2030. (13:33) It seems as though the energy transition needs artificial intelligence and artificial intelligence needs the energy transition. The so-called Next Generation Energy could help address this. (15:35) The other side of your new versus old economy trade is to underweight Australian equities. We have the Reserve Bank meeting today. What are your thoughts on Australia? (18:03) The other conviction view the team has is a preference for Japanese equities. We have the Bank of Japan meeting today to discuss interest rates. The expectation from the market is that the BOJ will end its experiment with negative interest rates today.

In this episode, Escala Partners CIO, Tracey McNaughton, celebrates IWD with a conversation with Lorna Kapusta, Fidelity's Head of Women & Engagement. How can wealth managers help women achieve their financial goals and become more confident investors? How can the skills learned by a motorcycle rider help ease financial anxiety? (1:20) Maybe we could start with you telling us a little bit about yourself, your journey, and how did you find yourself in the role of head of women and engagement at Fidelity Investments? (3:23) So what is Fidelity doing then to help women in improving their financial situation? You've been in this role for several years, haven't you? (5:51) What other things have you found that tends to hold women back from feeling more confident about stepping out there and managing their financial situation? (7:42) In your research, have you identified any issues that seem to be unique to women? (9:36) Have you noticed if that caregiving role has increased post Covid? (10:53) Having that plan almost acts like an anchor. It just calms you down when you're feeling anxious about your financial future. So just how important is that? (13:54) I think getting the message out there, that sitting down and having a plan, actually does the opposite. It calms you down and it just makes you see clearer, doesn't it? (16:29) You mentioned earlier about women, they think differently about investing and they can ride the ups and downs of investing better than men. Can you talk a bit about that? Why is that? (18:28) Are women more likely to seek out advice? (20:42) So a final question then, Lorna, from your sort of past, your previous experience, what's the best piece of financial advice that you've ever been given?

In this episode, Escala Partners CIO, Tracey McNaughton, makes the comparison to the 1990s tech boom and notes by comparison, the market is not that extended right now. AI is going deeper into the economy and broadening across more sectors of the equity market. The ingredients are there for the sustainability of this market rally. (0:44) We are just about through with the US earnings season. What is the final take on the results? (2:55) The share price moves have been staggering for Nvidia. It begs the question, is the stock overvalued? (6:34) Comparisons are being made between this AI boom and past bubbles. (10:58) Tracey, we often get asked by clients how can we position portfolios for geopolitical risk? How do you respond to that? (14:43) Tracey, we had our Investment Committee meeting yesterday and one of the most interesting discussions was around the divergence opening up between the US and Australia. The economic data seems to be getting better in the US but remains very weak here.

In this episode, Escala Partners CIO, Tracey McNaughton, discusses the results coming out of the US earnings reporting season and why Facebook and Microsoft are in and Tesla and Apple are out of favour – this despite Apple having a cash pile equivalent in size to the Hungarian economy.   (0:54) Tracey, we are halfway through reporting season in the US and it is looking good so far. (2:23) So, Apple has the equivalent of the Hungarian economy sitting in its cash account. (5:43) It's not all tech though, is it? Other, more industrial companies are also reporting solid earnings? (7:34) US regional banks are back in the headlines. What is going on there now? (13:37) The US Federal Reserve met last week. It was interesting, particularly when considered with the latest employment report out of the US. (16:01) While we are on the topic of central banks, Australia's Reserve Bank has begun a new era following recommendations that came out of the review last year. (17:25) Our independent member of our Investment Committee Gerard Minack says the market is being too sanguine about the number of rate cuts coming for Australia. Do you agree? (19:29) Before we go, you have just wrapped up heat week with your international equities managers. If there is one takeaway, what would it be?

In this episode, Escala Partners CIO, Tracey McNaughton, discusses how events of 2023 give context to what is likely for 2024. And, how should investors respond to the heightened geopolitical risks that are so evident in this “war economy”? (0:52) Welcome to the first podcast for the year. It seems fitting Tracey that we begin with your thoughts on the year that was. (7:48) Tracey you and the team have just released the fifth edition of our annual outlook publication, Agenda, what are some of the key takeaways? (9:50) This is another theme in our Agenda, the rise in defence spending in many countries around the world. (11:45) Can you tell us about supply chain security, how does that feature as a theme? (14:58) What about your views more generally? (16:10) 2023 was the year of the Magnificent 7 – Apple, Amazon, Meta, Google, Telsa, Nvidia and Microsoft. What is the outlook for equities this year?

In this episode, Investment Analyst, Darragh Kennelly, talks to Mike Harut and James Tsinidis of Munro Partners to discuss the main takeaways from the recent climate change conference in Dubai. They also discuss the outlook for companies focused on the many subsectors of climate change for the year ahead and get insights from James' recent trip to visit portfolio companies in the US.

In this episode, Escala Partners CIO, Tracey McNaughton, and advisor Ed Brooke are in conversation with Gerard Minack, independent member of the Escala investment committee.    

In this episode of The Fund Managers, CIO Investment Analyst, Darragh Kennelly, speaks to Seyonne Kang to learn more about Stepstone's Venture Capital platform and discuss the current landscape in VC markets and specifically look at secondary market opportunities for investors.

In this episode, Escala Partners CIO, Tracey McNaughton, discusses some of the investment themes that will drive markets in 2024 including whether the Magnificent 7 can continue to be magnificent. (0:52) The holiday and Santa Rally season is upon us, it seems. The stock market is once again priced for perfection. What is your advice to investors at this time of year? (3:37) What are some investment themes to look out for in 2024? Some equity analysts are calling for 2024 to be a "stock picker's paradise." Do you agree? (9:25) And then there is the whole AI safety issue that has been elevated in the wake of Sam Altman returning as CEO of OpenAI after being fired just four days before by the OpenAI board. (11:25) One of the major topics of discussion at our Investment Committee meeting just yesterday was the outlook for Australian equities. We have been neutral Australian equities all year. Has that view changed? (14:27) And speed in bringing down inflation is important, isn't it? (15:29) Tracey, you and the CIO team are about to go into your annual offsite meeting. On the agenda, as always, is a decision audit. Can you explain what that means and why you do it?

In this episode, Escala Partners CIO, Tracey McNaughton, discusses the implications of investing in a world where governments and their debt burdens are getting bigger at the same time as consumer waistbands are getting smaller. (0:50) Interest rate cut expectations are being priced back into the market for 2024 again. Despite this, the market was put back in its place last week by Fed Chair Jay Powell.   (2:53) We have been talking a lot about fiscal policy recently in our meetings. Governments everywhere seem to be in a spending mood. This will act like a cross current, won't it – pushing against the central bank attempts to slow growth to rein in inflation. (6:02) You have called this a fiscal policy renaissance. For the first time in several decades, fiscal policy is taking a lead role in driving growth in the economy. What are some of the investment implications of this? (8:09) The investment implication that comes from this is the attractiveness of investing in floating rate bonds. (10:32) So, what is the catalyst – is it valuation or is it something more? (12:17) Earnings season in the US is almost over. Were there any surprises? (15:29) We can't finish, Tracey, without talking about the latest mega trend sweeping the investment world – GLP1's. What are GLP1s and why are they having such an impact?

In this episode, Escala Partners CIO, Tracey McNaughton, talks about the economic conditions that are necessary (though maybe not sufficient) for geopolitical stability to return to the global economy. (0:54) Tracey, lets start by talking about prices. Not just any price. More than anything, financial markets over the September quarter were driven by the most important price in the global economy. It's not the price of oil though, is it? (6:19) We received a question from a client recently: We are now operating in a world where there are two major wars happening at the same time as global co-operation is being tested. What will it take for geopolitical stability to return? (11:38) Tracey, you mention their populist politics being associated with inflation and inequality. Can you go into that a bit deeper? (12:01) I'm guessing a very long time.

In this episode, Escala Partners Investment Analyst, David Bruty, and CIO, Tracey McNaughton, talk to Rory Green from TS Lombard about China and artificial intelligence. This presentation will discuss questions such as what are the factors that will govern the development path of AI in China? How will the CCP control AI and its impact on society without dampening innovation and progress?

Toby Walsh is a professor and the Chief Scientist at UNSW's new AI Institute and has spent the past 40 years researching artificial intelligence. He is the author of several books on AI including “2062: The world that AI made”. This presentation will discuss questions such as can we trust AI or will it increasingly deceive us? How can we ensure AI is harnessed as a force for good rather than for nefarious ends? This is Part 2 of our two-part podcast. Here we will be talking with Toby about the worlds oldest profession (it is not what you think), autonomous vehicles, how parking stations and insurance will be a thing of the past and why the CEO of Volvo Australia called Toby on his way to an interview with ABC. (1:55) - Just staying with that question of autonomy, but now moving to self driving cars. They talk about the dangers of self driving cars - at times I wish there were some artificial intelligence in the car. (5:18) - How do we manage the 1%? In terms of the question around accountability, who do you blame? (7:50) - I read somewhere that you were in a taxi on your way to an interview and you got a call from the CEO of Volvo. (10:18) - When will we see the first legal case of car vs maker? Will we see an increase in lawsuits? (11:22) – How do you think cities are going to change? Are cities going to become greener? (15:21) – What timeframe are you talking in terms of autonomous vehicles? Is it already on the road in San Francisco? (17:33) – What about health data? The whole insurance model works on the basis that we pool our risks. Does the whole insurance model begin to break down? (22:06) – Wouldn't you rather know the data so that you can then address it and alleviate it? Could having the data lead to beneficial side effects? (24:07) – It's been estimated that it would take an internet user something like 76 working days per year just to read all the things they've agreed to online. (25:00) – One of the things I was most surprised in the book was the relationship you talk about between Big Tech and Big Oil. (27:12) – Are you an optimist about what the future holds?

In this episode, Investment Analyst, Darragh Kennelly talks to Jessica Cairns of Alphinity Asset Management to discuss recent progress from Australian companies transitioning to net zero. We hear about some of the innovative ways companies are reducing their CO2 emissions. Finally, the rise of A.I. will have many implications for ESG investing, the pair discuss some of the early work Alphinity have done around Responsible A.I. and the risks and opportunities it presents.

Toby Walsh is a professor and the Chief Scientist at UNSW's new AI Institute and has spent the past 40 years researching artificial intelligence. He is the author of several books on AI including “2062: The world that AI made”. This presentation will discuss questions such as can we trust AI or will it increasingly deceive us? How can we ensure AI is harnessed as a force for good rather than for nefarious ends? In Part 1 of this two-part podcast, we will be talking to Toby about the decisions that machines make, the biases that are embedded in them and the military use of AI and the implications it has for geopolitics. (2:22) - Are we becoming less intelligent while the machines are becoming more intelligent? Or are we freeing up capacity to turn our mind to other, more important, tasks? (5:27) - Can machines make better decisions than humans? (7:45) - You talk about how the machines can make better decisions, but there's also the nefarious side, such as the privacy issue of being monitored and now the machines can do facial recognition. (9:15) - So, this goes to the whole idea of the need to regulate artificial intelligence, but how do you do that in a way that doesn't then stifle the creativity and the future benefits? Is it possible to regulate AI and how is the best way to do it? (11:17) - It feels like the technology is developing and progressing so quickly, the government is already behind the curve. How can they catch up and move with it? (13:29) - I'm interested in your work on the United Nations campaign to ban autonomous killer robots. How is geopolitics going to change because of AI? (16:12) - Is the Australian government involved in the military use of artificial intelligence? (17:03) - Is there anyone developing autonomous military vehicles that are nuclear? It's one thing for a robot to shoot down a plane, but to start a nuclear war? (19:25) - I'm guessing there is no override button that a human can push to at least stop it on time? (19:42) - Who's working with governments on this? I understand Google made the decision to pull back from their involvement with the US military.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about India's breakout moment and how investors can take advantage of it while being cognisant of the investment risks. The Australian earnings season reminds us of the diversity of impact that higher interest rates are having on different age groups in the economy.   (0:52) - The Reserve Bank of Australia met this week, no change in interest rates was the call. Does this mean we have reached the end of the tightening cycle? Is a rate cut around the corner? (3:35) - You and the team have done some research on the investment case for India, can you share some of your insights? (6:04) - Why is India seen as a key beneficiary of the China plus strategy? (7:36) - It doesn't come without risk though, does it? What are some of the risks to investing in India? (10:10) - What about investment challenges? (12:38) - So, India is having a moment. The investment case is there albeit with some risks. How can investors access India? (13:45) - The final numbers are in for the month of August. Equities were weaker, bonds were weaker and the Aussie dollar was weaker. A challenging month. (16:59) - Just on China, we were talking in our morning meeting about how uneasy the current financial climate feels and where the next crisis could emerge from. China was mentioned.

In this episode, Escala Partners CIO, Tracey McNaughton, talks about where the CIO team believe the biggest risk is currently for financial markets and why investors need to be more discerning in their asset allocations as a result. (0:56) - We are going to begin this week, Tracey, with a question from one of our clients – actually it's one that is asked often in our client meetings. What is the biggest risk right now? (4:43) - Speaking of China, the economy remains under a dark cloud – we have had a lacklustre re-opening out of covid and now issues in its property market are boiling to the surface again. (8:22) - How much will China factor into the deliberations of the Reserve Bank when it meets next month to consider interest rates? (10:14) One of the biggest moves in the market over the past fortnight has been in bond markets. Bond yields around the world have risen sharply in the past week. What is driving it? (12:38) - The recent Bank of America fund manager survey seems to confirm this more optimistic view.  (15:52) - Japan it seems is receiving more attention in the past few months than it has ever received in the past few decades. Why the sudden interest in Japan?

In this episode of The Fund Managers, Escala Partners Investment Analyst Stephen Dickinson talks to Jan Mühlemann from PG3. Jan discusses the royalties finance sector, the growth and opportunities in the royalties universe, and the benefits an allocation to the royalty finance sector can provide.

In this episode of The Fund Managers, Escala Investment Analyst David Bruty interviews Sam Twidale, Portfolio Manager of the DNR Capital Australian Emerging Companies Fund. Sam explains the importance of applying a consistent quality framework to small cap investing, how the fund's concentrated and style-neutral approach has allowed it to outperform across changing investment environments, and the outlook for the sector following a challenging period for returns.

In this episode, Escala Partners CIO, Tracey McNaughton, gives a wrap-up of the US earnings season; why Biden may just be the most “America First” President in over 30 years; and why the Reserve Bank of Australia is likely now done with rate hikes. (0:49) - So Tracey, tell us, what mattered this past fortnight for financial markets? (2:13) - We might leave the discussion on the accuracy of central bank forecasts for another day. Just on corporate earnings – what are the key themes that have emerged? (6:31) - Manufacturing has been in recession in many countries and all for the same reason – coming out of covid consumers turned to spending on services rather than goods. Is there any evidence of a bottom being reached for manufacturing? (8:41) - Let's turn to the news about the downgrade of US government debt. The last time this happened was in August 2011. I guess the question is, why now? (11:57) - What are the implications of a higher level of government debt? (14:01) - We had the Reserve Bank meeting last week where the decision was made to leave interest rates unchanged. We also got some revised economic forecasts. (15:46) - Is the tightening in household budgets showing up in the data?

In this episode, Escala Partners CIO, Tracey McNaughton, shares her views on why the probability of a recession is higher in Australia than the US; what the greatest risk is for investors; and why royalties funds may get a boost from AI.   (1:23) - It doesn't seem that long ago that we were talking about a US recession and the need for rate cuts. That kind of talk has faded significantly hasn't it? (4:52) - The US Federal Reserve is meeting this week with an announcement due Thursday morning our time. The market is expecting ‘one and done' at this meeting, what are your thoughts? (5:42) - The fund managers surveyed say the biggest tail risk right now is high inflation forcing the Federal Reserve to remain in restrictive territory damaging the economy in the process. (7:37) - Speaking of fund managers, you and the CIO team are in the middle of Heat Week. Any insights so far? (12:20) - Turning to Australia, what are our fund managers saying about the outlook here? (14:14) - Finally, earnings season is underway in the US. Are companies feeling the heat from the rate rises over the last 15 months?

In this episode of The Fund Managers, Escala Partners Investment Analyst Stephen Dickinson talks to Mark Landau, Co-Founder and Co-Portfolio manager of L1 Capital. Mark discusses L1 Capital's investment approach and their focus on value and quality.

In this episode, Escala Partners CIO, Tracey McNaughton, discusses the challenges facing the Bank of England as it attempts to deal with its first wage-price spiral since the 1970s. It's the nightmare that haunts central bankers everywhere and is one reason why interest rates will remain higher for longer.     (0:48) - Central banks over the past few weeks have been surprising markets everywhere as the fight against inflation continues.  (5:00) - It is interesting you say the Bank of England governor is concerned inflation is not coming down fast enough. (7:33) - The question on everyone's mind is where is the next problem to arise as a result of this rapid rate hike cycle? (10:16) - Why were so many of these loans unhedged? (12:00) - Given the surge in interest in private markets, is it possible the private equity market will break before the public one does? (14:11) - July 14th is when the all-important US earnings season kicks off. What are you looking for?