News & Insights

Livewire: Abnormal returns

In year 427BC, the Greek philosopher Plato founded ‘The Academy’, which is considered the world’s first university. It is somewhat fitting then that half of Sydney-based fund manager, Plato Investment Management’s team have PhD’s.

With so much grey matter focused solely on generating equity income for their clients, it’s no surprise the results are impressive. Managing Director, Dr Don Hamson, shared in this interview that their investors will have received 16% gross yield after fees this financial year. That’s about 10% above the gross yield of the index, though Don cautions that these were ‘abnormal returns’ supported by some political and corporate one-offs. 

So what is the outlook for dividends post-election? In our latest fund manager interview Don addresses this question, highlights one part of the market that remains under-appreciated for income and explains what he believes is the single most expensive asset in the market today. 

Topics discussed

  • The outlook for equity income on the ASX.
  • How lower rates are pushing up prices of riskier assets.
  • Abnormal returns and what investors can expect in the year ahead.
  • The single most expensive asset in the market today
  • Overlooked opportunities on the ASX.
  • Dividends staples: The outlook for bank stocks and Telstra.

If you just screen for the absolute highest yielding stocks you’ll probably come up with a few traps. That means your capital is at risk and you may lose money on that.

Written by James Marlay
Originally published in Livewire