Weekly update on the impact of COVID-19 on the financial markets
Chris Rands - Nikko Asset Management - Tuesday 28 May 2020
Paul O'Connor (POC): Welcome to the Netwealth Investment Podcast series. My name is Paul O'Connor and I'm the head of Investment Management & Research. The Investment Management & Research team looks after both the investments we make available to you through our super and non-super investment platforms, but also the managed funds and managed accounts we issue. So spend a lot of time interacting with the fund managers. The due diligence we undertake on funds provides a lot of insight into the views on the global economy, financial markets, and investment strategies offered by fund managers. Today we have Chris Rands from Nikko Asset Management, who is a portfolio manager working with the Nikko Australian Fixed Interest team. In addition, Chris provides macroeconomic insights to the broader investment team and clients of Nikko. Good morning, Chris, and welcome.
Chris Rands: (CR): Hi Paul, and thanks for having me on today.
POC: Listeners to the weekly podcast will be familiar with the discussions we've had in recent months with chief investment officers and portfolio managers on their views of the impact that COVID-19 is having on the global economy and market valuations. Given Chris's role involves both macroeconomic research and Australian fixed interest markets, I thought we'd focus today's discussion on, I guess, the COVID-19 impact on Australia and economic outlook, and really what that economic recovery will look like going forward. Nikko have a broad range of active managed funds available on the Netwealth Super and IDPS investment platforms, including the Australian fixed interest funds that Chris and his team work on. Chris it's sort of feels like the old norm of going into the office five days a week is a distant memory, so how were you coping working from home and interacting with both the Australian and the global investment team at Nikko?
CR: Yeah, so I think like everyone else you find it's obviously not ideal, but it's been so far so good. I actually joke with, I sit next to the head of the team and the co-PM on this fund, and we've actually been talking more on chat, I think, than we do in the office at the moment. Simply because we're on the chat and there's not a lot else to do, but even with the Zoom meetings, the routine nature of some of the meetings that we have set up with the offshore colleagues, it's been pretty seamless in terms of as far as it could have been.
POC: Your, I guess investment teams, and particularly when you're working for a global investment manager, it really has put the emphasis on communications and modern form of communication, so perhaps you're a better place than a lot of us to embrace this technology. But I sort of find myself I'm now, well comfortable in terms of using Microsoft Teams, and having daily interaction and discussions with the investment management team at Netwealth. So yeah, we're all changing and adapting to the environment we're currently living through. The actions of central banks in terms of the monetary policies, and federal government stimulatory fiscal policies that have been enacted over the last three months does not seem to have attracted the attention of the media, which is probably quite rightly due to the media's focused on the human impact of COVID-19. But do you think the extraordinary actions will avoid a global depression?
CR: Yeah. So when I kind of think about where we are and what we're looking at, and what we've gone through, I think we do need to be cognizant, I guess of the words that we're using and what we're looking at. So with the word depression, everybody probably kind of gets their own idea in their own mind, but it is important to remind people that depression is something that goes on for many years. So, if you look at the U.S. Great Depression for example, GDP fell in 1930, it fell in 1931, and then it fell in 1932. So, you know, if I say, "Is this going to be a global depression?" Mostly I say "No," because my expectation is that once the economy reopens, that GDP won't be lower in 2021, and it won't be lower again in 2022, that this is going to be a one-off shock that we kind of come out of. So more of a global recession rather than depression.
POC: Well, I guess the key drivers of economic growth globally being the U.S. and the Chinese economies, it appears in both those countries that the spread of COVID-19 appears to have peaked. So have you got any thoughts on what their economic recoveries are going to look like? And do you think those economies over the medium term, I guess over the next one or two years can get back to 60%, 80% or even 100% of the output that was pre-COVID-19?
CR: Yeah, so this is obviously probably I guess the hottest question to think about, and my thinking of this kind of comes in two steps. So the first of those is how long until we're going to be open again? For this I think you can look at China, you can look at South Korea, you can take Wu Han, I guess as your first example, and to say those cases peaked in those countries around kind of mid to late February, and then by kind of mid April they were starting to open up again, and that seems to be a very similar timeline that we're on here where. Where we closed down mostly at the end of March, and now we're starting to see the other side of it. So, you know I kind of start thinking that the first step is here to say that sometime over the next kind of three months we should be moving somewhat back to normal.
CR: And that leads you on to probably the tougher question of, but what does it look like when it opens? Now to me, I think you can throw out all sorts of crazy unanswered questions. You know, how long do we have to maintain social distancing? How long is international travel closed? Have people had to draw down their savings? There's just all these uncertain ideas sitting here, that make it very hard to really know what that is going to look like. But if I really had to guess, I would probably say, I'm thinking that we get a decent bounce once the economy opens kind of to two-fourish, and then after that, those nagging doubts of all those questions that I kind of said, see the economy recover somewhat slowly, so that we've probably taken back about 95% of the reduction at the end of next year. But then after that, the economy just grows a bit slower than what we're used to.
POC: And I guess the other question is, what will that economy look like in terms of the amount of change that will occur as a result of COVID-19, and the economic downturn and the impact that will have on business models and particularly weaker business models, I would have thought?
CR: Yeah, I mean the best place to look at that is to say how much debt have companies had to take on through this period, and what does that mean for investment. You can throw out thousands of questions at the moment and just end up scratching your head, I think.
POC: Yeah, yeah. At times I think it might be better to take a two year plus lens, to try and look through the noise and the volatility that will probably continue in markets over the short term. But a very difficult question to answer I guess. In Australia, we've seen the federal government's response with a dramatic increase in spending on welfare packages, including the much and currently publicise Job Keeper allowance. But the Reserve Bank has also acted decisively by cutting interest rates and introducing our own version of quantitative easing. Perhaps as a starter and for the benefit of our listeners Chris, could you explain what is QE, and how does QE, or the Australian vision of QE vary from other central banks form of QE?
CR: Yeah, so quantitative easing is simply central banks buying assets, and typically they're doing that to ease financial conditions and provide liquidity to the market. So central banks will start doing this when interest rates have hit zero, because there's no additional way really to provide support to the economy by lowering rates. If we look at Australia's example, what the RBA has been doing is they've been buying government bonds. That's both federal government and state government bonds, and that is to help lower the cost of borrowing for those organisations. In other countries like in Europe and Japan, they actually have bought corporate bonds, they've bought equities, they've provided a far greater range of support to the market. And really depending on how, I guess, hurt the economy is, and how far you need to take rates lower will dictate how much additional purchases you really need to do as a central bank.
POC: Yeah. It's sort of interesting, the veering purchases, where I think even the Japanese Central Bank's been purchasing ETFs and they're one of the biggest buyers of ETF. So yeah it's interesting the way they have broadened their universe of assets that they would purchase. But I also heard an interesting comment recently of a trader from the Australian Office of Financial Management, who made the comment that in practicality, QE simply involves giving him a bigger balance sheet when he turns on his computer of a morning, which I found quite interesting. Where there can be just another zero added to the amount of assets that can be purchased, so yeah in pract-... that can be purchased. So yeah, even practicality, I guess it's quite simplistic there. So in your view, what impact have these policies had on Australian economic growth so far? So both in terms of the spending on welfare packages, but also the monetary policy response of the RBA.
CR: So I think these policies have had a huge impact so far, and that's not only in ensuring that the economy has been functioning now, but I think also setting us up for the three to six months time, when we start talking about how is the economy going to come out of this? Now, I pulled a pretty good example of just kind of thinking about what some of this stuff means from the RBAs financial stability report. And what they said was that about one quarter of businesses typically do not have enough liquid assets to cover one month of expenses, and closer to half could not pay for three months expenses. Now that includes wages. So if you think of the stimulus, the JobKeeper, where the businesses are getting payments straight to them to pass to the employees, this is in my opinion keeping a sizeable chunk of these businesses alive.
One quarter of businesses did not have enough expenses to cover one month. So the fact that we've been in this for two months, and we're not seeing huge amounts of bankruptcies yet does tell us that it's been pretty effective in keeping businesses afloat through this period. And when we look forward into the next three to six months, that sets us up to ensure that when the recovery is ready, we'll be looking to go. The other thing that I think really sits on here, is it's given people who would have been otherwise made unemployed some certainty in their spending and ensuring that their life can continue.
The government announced that there's been three and a half million people that have been receiving the JobKeeper payments. Now, as a simple example, every Australian probably loves housing, even just the connection that it has with this I think is quite interesting to think about. So if those millions of people didn't get the payments, then we probably would have started to see a bit of forced selling come through the housing market. The fact that we haven't seen that is probably a testament to the fact that these payments are doing exactly what they should do in keeping people spending, keeping them afloat, and being able to think about how we come out of this mess rather than thinking about how I'm going to eat. So most of that to me says it's been very, very good policy.
POC: Yeah. Well, I guess given that it was policy that was put together in a very short time frame, I tend to agree with you. I think the efforts of both the Federal Government and the RBA been extraordinary in just maintaining the economy and keeping it actually moving. So yeah, it's been a great response there. The Australian unemployment rate is receiving a lot of debate about what it actually is, in terms of the correct figure, and we know that the JobKeeper and JobSaver packages are keeping many Australians employed, but have you got a view on what the current unemployment rate is and where you believe it will peak?
CR: So my feeling coming into this was that it would be around 10%, which if you look back through past crises is not super dissimilar from what has occurred. Now, if we go back to those JobKeeper payments and use that as our starting point, the government, as I said, announced 3.5 million recipients at the moment. More recently in the employment statistics they said about 600,000 people were not employed compared to last month, and that an additional 750,000 people worked zero hours last month. So if you back of the envelope stuff, that say 20% of those people that worked zero hours last month eventually end up unemployed, then the increase in unemployment looks like it's going to be about 800,000 to a million people, which does take you to that low teens.
It's hard to forecast directly the unemployment rate, because of the way that the participation rate affects that. So if you look back to last month you'll see that there was huge job losses, but the unemployment rate only rose to 6.2%. And the reason for that is because if you are not looking for work you don't get counted in the unemployment statistics. So a big part of the reason that that number looks so strong was that a lot of people probably aren't looking for work because there are no jobs. And so rather than being unemployed, you just drop out of the labour force. So I think it's better to focus on the outright number of level of job losses, because that's a little bit more consistent than a number that can move around based on definitions.
POC: And I guess ultimately where the unemployment rate peaks at will be determined by the duration of the economic slowdown, and how long it takes in terms of getting the economy back to whatever is full capacity going forward there, Chris. Yeah, not an easy question to answer. Geopolitical risk has risen significantly this year, and even highlighted just recently by the announcement that China has imposed tariffs on Australian barley. Do you think China will pause from imposing any further tariffs on the Australian economy?
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CR: When I look at this, it's hard to kind of determine short term, but I think longer term the answer is that we're probably going to end up in more of this trade dispute rather than less. Now, at the moment a lot of this looks like it's around transparency around COVID, but this has actually been something that we've been looking at for a much longer period, because there's a thematic sitting under the surface here.
So it's probably no surprise to your listeners that Australia is tied the US in terms of cultural and defence links, but economically now China is our biggest trade partner. So as this dispute between China and the US simmers, I think that what we're going to see is that China continues to use its economic might over countries like ours, to say that we can't just be an impartial bystander, you can't support the US position on one side and then come and try and tell us our goods and profit on the other.
Now, the reason that I say this is a bigger picture thematic is that there was a RAND report in 2018, they're a military think tank, and they said that the US probably would not be able to beat China if a war occurred on the Chinese mainland now. Now you probably don't really want to talk and think too much about war, but if you're going to be making trade threats, you generally need a bit of muscle to back them up. So as China becomes the dominant player in the Asian region, if the US isn't ready to step back from that position, I think we're going to get pulled into a tug of war, which lends itself to China using its abilities that it has to try and pull us in their direction rather than the US's.
POC: And I guess the Chinese built embraces policy, and the rollout of their infrastructure build globally is also giving rise to further geopolitical tension with the US, and we've even seen the Victorian Government become embroiled in recent days about a memorandum of understanding they signed with the Chinese in 2018. Which is also extraordinary given that, under the constitution, foreign policy and those types of decisions actually rest with the Federal Government. I think geopolitical risk is an ongoing challenge that all financial markets are going to have to deal with going forward as the world starts to recalibrate economically, from the US being the dominant part of the economy for the best part of the last 70 or 80 years.
Moving to the Australian bond market, how is the market actually looking? And I note that liquidity appears to have moderated significantly since mid March, which I'm guessing has been due to the actions of the Reserve Bank of Australia.
CR: Yeah. In mid March it was as bad as I've ever seen it. So the liquidity was absolutely terrible, depending on what you were trying to trade. There was in some circumstances basically no ability at one stage to sell certain bonds. Government bonds were always a little bit more liquid, but even that got about as bad as I've seen it, the cost of trading has risen substantially. But as soon as the RBA came and announced its QE programme, which as we described before is purchasing government bonds, that liquidity in the market very quickly returned. So they injected I think over the past two months about $50 billion of cash by buying government bonds, and that really freed up the banks and the traders is to start making prices again and give people a bit of confidence in the market.
So, so since that period, we've actually seen liquidity in government bonds go back close to where it was, not quite to where it was, but it's basically back to where it was now. But if you look at the corporate market, it's still very hit and miss. So if you own a corporate bond that is in a sector that's doing well through this environment, it's very well bid, it's very easy to trade it, but if you're trying to sell a bond in a sector that has been hit hard by the crisis, it's very hard to still find a seller. So most of the liquidity has been returned, but there's still pockets that are very hard to trade.
POC: Interesting there. I guess I've noticed it with the updates from all of the funds, the traditional fixed interest funds, the buy-sell spreads, which for the listener typically will highlight the underlying liquidity and the assets held in the fund there. As a general rule it will return close to normal there, but there are pockets of these private I guess unlisted debt.
These private, I guess unlisted in debt portfolios that, where spreads are still significantly elevated, and in terms of bond market pricing, I guess I've always regarded the bond market as the best indicator of future economic growth. So what's bond pricing currently inferring for the future?
And I guess on one side, you've got the equity market, that's still held up quite strong in valuations, and you've got the bond market that appears to be telling us that there'll be no inflation or, and very little economic growth for the next 10 years. So what's your view there, Chris?
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CR: Yeah, so I won't say too much on the equity market, given I'm a bond guy, but I guess for your listeners, the best way that I like to describe what the bond market is telling us here is just to pose a very simple question that is worth thinking about. So that is, in what economic circumstances do all major central banks need to have zero interest rates and in some cases negative.
Now, when you really think about that question, what you end up saying is it's an economic environment where growth is poor and businesses need continued support from the government and the central banks in order to pay their debts. And so at the moment, with bond markets at all time lows, with the futures market telling us that cash rates are going to be zero for years to come, across most central banks, I think that the easiest way is to say that is that businesses and the economy in general are not in great shape, and the market is expecting that to continue for at least two to three years.
POC: Mm, interesting. And in terms of the, you'd mentioned a couple of areas of the bond market where liquidity hadn't returned, are they the areas that are causing you the most level of concern in terms of the investment universe you have?
CR: Yeah, so we, when I think of concern, I think it's probably good to split this into two ideas in terms of what we're looking at and what could potentially occur. So the concern that I have at the moment does come through the corporate sector, and that is because this is the first time since the GFC that there's been real default risk sitting out there at the moment.
So the best way to describe that for everyone is that in fixed income, we spend a lot of time talking about whether interest rates will go up or down, but broadly speaking, with enough time, you can recover from that. What you generally don't recover from is a default. So if you own a corporate bond and they can't repay their money, if they can't repay you, that is when you will take a serious loss in fixed income.
So because the economic environment is so poor at the moment, the sectors of the economy that are not doing well is where the concern really comes from. Now you think of concern, but for some, it's also going to open up opportunity. When you look at the corporate market, the areas that the federal reserve stepped into.
So to put a bit of perspective to this, the federal reserve announced corporate bond buying, in the areas where they announced corporate buying spreads and yields typically did very well, but the sectors where they are left out typically have been constrained. So at the moment, most of the concern that we're looking at is really not necessarily corporates in general, it's the specific sectors that have been hit the hardest.
POC: Chris, in terms of the securitized debt opportunities out there in the market, and maybe for the benefit of the listener there, there are securitized state vehicles that would be potentially like portfolios of housing loans and corporate debt loans, and I guess there were vehicles like residential mortgage backed securities. How are they trading at the moment? Do you have any concerns given the potential property market slowdown, and I guess the impact on the office and the retail property sectors that we're seeing occur at the moment?
CR: Yeah. So to really think about this question, I think this is probably one of the best way to really describe risk versus reward at the moment, with the RMBS transactions. So as a simple example, in an RMBS transaction, what they do is they put a whole heap of housing loans into a pool, and then they will sell bonds associated with those mortgages, which is split into different levels of risks.
So, as a simple example, you might have a senior and a junior note, and if any of those housing loans don't repay, that junior note will be the first one to weather losses. So in the scene, you're going to have, the housing market might need to fall X to cause you losses, and then in the junior note, it's going to be a lot lower in terms of how much loss you can see in the housing market before you start to lose your money.
At the moment, if you think of the highest rated RMBS, so those that are rated AAA, those that sit right at the top of the capital structure, the types of assumptions that go into these things are the housing market needs to fall 45%, 10% of homeowners need to default. Those types of assumptions haven't actually occurred in Australia over the past 70 years, and they didn't actually occur in the U S over the, through the GFC, either. So if you're looking at the corporate credit market, if you're looking at AAA RMBS, there's a lot of protections in place.
Once we start sliding down that capital structure, though, that's when you start relaxing those assumptions. So rather than thinking about a 40% decline, you might be thinking 20 or 30. Rather than 10% of people defaulting, you might be 2 to 5%, and that's when these figures are actually starting to look like they could occur. Not that it's your base case, but there's the potential that they could occur.
So depending on how you see the housing market next year, if you see a kind of 20 to 20% decline, then some of these junior rated notes are going to probably come under some pressure, potentially be downgraded because they don't have as much protection in place. And this is why I think it's a good way to show the risk and reward in credit, because when you buy those junior notes, you get a higher yield for doing it. You're taking on more risk, but when things go wrong, you're the first one in place to lose your capital.
So at the moment, when I think about concern, when I think about the RMBS market, the AAA assumptions where we're pretty comfortable with, but some of those junior notes, I think there would be a bit of concern depending on just how dire the property market gets in the next 6 to 12 months.
POC: Interesting. So yeah, you're reasonably comfortable then with the better quality mortgages there, but I think quite rightly there, as you move, you move down to the lower rated tranches of mortgages that can be held within these types of securities is where we might see some concerns and volatility going forward over the next 18 months or so.
Have you got a view at the moment on the A dollar, and I guess that's been a bit of a yo-yo recently. In early March, I think it dropped down as low as 55 cents to the US dollar and then recovered to 65 cents. So have you got any view on the direction and potentially how low the dollar could go against the US?
CR: So when I look at the Aussie dollar, I usually focus on two things. So that is the interest rate differential versus our peers. So that is how high are Australian interest rates versus other countries. And the second thing is commodity prices. At the moment you take that first one of interest rates, and you say, all interest rates across the world are going to be at rock bottom levels, and that there's no real yield benefit for owning Australian bonds over other assets. So we kind of lose that upside from the interest rate differential.
And that just leaves us basically looking at commodity prices. When I look at commodity prices at the moment, I don't think there's going to be huge upside in that sector. So we're going into a slower growth period, and because of that, it's hard to tell what the commodity demand is going to be in the next one to two years. Now, there's probably a bounce once we come out of the COVID side of things, which will lift things higher, particularly in things like oil, where there's a limited demand in some countries at the moment. But once you get past that, it's kind of hard to see what the driver for commodity prices is going to be.
So what I end up thinking about is how strong is my China growth assumption here. If China comes out of this and grows very strongly, I would think that commodities do okay, and that's when we start to see a bit of AED upside. But alternatively, if it's a malaise and they can't come out of it, or if they start trying to push us on trade or something like that, then they won't quite be that upside.
So at the moment, what I end up thinking is there's probably still a little bit of upside as things start to look better, but it's not going to be sustained once the economy gets back on its feet, because I don't think growth is going to be as strong to warrant prices moving the way they did in the past.
CR: Yeah, well I do recall vividly the actions of the Chinese in 2009 and the impact that had on the demand for commodities, and particularly iron ore, that it really saved Australia through the global financial crisis, there. So have you got any views or thoughts on the potential for the Chinese to announce extraordinary fiscal policy response?
Yeah. This is one of those things you'd probably tell I ended up in quite a different mindsets on things sometime. This is where I think there's a huge push and pull going on. So, if we go back to this geopolitical idea and that comment that you made that in 2009, it was the stimulus that kind of saved the world and the economy, so to speak.
Yeah. This is one of those things you'd probably tell I ended up in quite a different mindsets on things sometime. This is where I think there's a huge push and pull going on. So, if we go back to this geopolitical idea and that comment that you made that in 2009, it was the stimulus that kind of saved the world and the economy, so to speak.
POC: Kevin Rudd might have you think otherwise there, Chris.
CR: When I think about this to say that China is entering a trade war with the United States and it seems to be slowly moving back into the front of our minds. Do the Chinese want to do such a huge trade deal that they lift all the trade partners out of this and give them the benefit while the US comes and points their finger at them saying, "You guys are doing poor by everyone in the world."
So, you look at what's going on and you say, "China's putting tariffs on us, then why would they stimulate the commodities to kind of offset at the same time?" What I kind of think more likely is to happen would be they would have focused their stimulus on their internal sectors in trying to get their spending and demand backup rather than infrastructure, which might not flow out into the world the same way that it did in 2009, but would still be net positive. But at the moment, I think it's just very hard to tell because you're very much leaning into this trade war at the same time and whether or not they want to stimulate the world during that is I think an interesting question to think about.
POC: Yeah, it certainly is there and I guess only time will tell in terms of finding the answer to it. So I'm just conscious of time there. So maybe just the last question on the Australian economy. Have you got any thoughts looking forward about any significant or major structural changes that you think the current economic downturn will drive in the Australian economy over maybe the next two, three, five years?
CR: Yeah. So this is another one of those ones that I kind of end up in all sorts of different directions when I think a lot about it. I think the most simple answer is to say we're going to be moving to a more online economy and the structure of the workforce is going to change in that the job market becomes more flexible. Even before this when were joking that it would be nice to work a few days from home and not quite be in the office as much, I think that is probably going to happen. But at the same time, I'm a little bit uncertain how true that's going to be over a longer period of time simply because of what we're used to.
So when I think of myself, it's nice to have some flexibility. It's nice to be able to do that, but I've also kind of got this 10 year corporate knowledge baked into me that "You're going work." So I do feel that there is a little bit of old habits are going to die hard and that once the economy starts to open up again, we probably find that quite a lot of people just end up doing what they were. So my feeling is that over the next kind of 12 to 18 months we have this push where everybody tries to get their flexibility and get those things in check. And then once we start moving back, that the kind of routine day to day takes over again and there's not actually substantial changes kind of three to five years out.
POC: Well, I guess that's human nature isn't it, to revert back to what we're comfortable with? And I think even before the podcast here where I made the comment to you "I'm not sure whether I'll need the three suits that I still have sitting in the cupboard at home there." That could be an impact in the economy there that the sales of suits could drop significantly. To finish the podcast there, Chris, we normally ask our guests if they've got any personal investing tips that you've applied maybe through your own life and is central to your personal investment philosophy. So have you got one or two tips you could perhaps share with our listeners?
CR: So this is probably not as I guess sexy as maybe as you might hear other people say, but one of the strategies that I use quite a lot and quite often is I try to just question everything and every assumption that goes into what I read. So when I look at things, I don't think there should be a topic off the table at the moment which you're not willing to think about. So, for example, when you hear someone like me say "600,000 people lost their jobs and that could mean growth does X percent," I think it's very important at the moment to step back and say, "What does that actually mean? How much are these people going to reduce their spending? What does it mean for homeowners? How are they going to react when September occurs?"
Because everybody at the moment is going to be making some pretty big assumptions about what they believe, and if you dig into those assumptions with these types of questions, you'll be able to see what's wrong. And my philosophy more is to try and find where we could be wrong with our thinking and thinking like this and questioning everything I think is the way to really get there.
POC: Yeah, it's interesting. I guess all of our more forward-looking views on the economy and the markets inherently involve assumptions and I think it is part of human nature that we take certain assumptions for granted and we don't question them enough. So I think it's a very, very valid point you've raised there, Chris. And have you got any specific thoughts finally for our listeners that might assist in actually navigating the current financial crisis with their portfolios?
CR: Yeah. I think the best place to look at this moment is just to keep your eye on the central banks. It can be pretty boring and mundane stuff reading what they're talking about and what they're doing. But when you look at this idea of rock bottom bond rates but the equity market doing well, I think a big part of that is central bank interference, if you want to call it that. Central banks buying equities, buying corporate bonds, that pushes prices to levels that typically wouldn't be around if they were left to their natural forces. So I think a good tip at the moment is to really keep your eye on the central banks. I know everybody will be, but if you can kind of dig into and read what they're talking about, understand the buying policies, you'll kind of understand one of the biggest buyers in the markets and get a better feel for what could occur after that.
POC: I think interesting and certainly a valid comment given the impact that they have on the economy and valuation of assets there to closely monitor central banks. But as you say, easier said than done. It's normally the norm of the fixed interest type of nude or the economists out there, of which I know a few including myself. So anyway there Chris, thank you very much for joining us on the Netwealth Investments Series Podcast this morning. It's been extremely enjoyable and your comments and your insights have been extremely valuable. So thank you.
CR: It's my pleasure.
POC: To the listener, thank you again for joining us. I hope you've enjoyed the podcast this morning, and I look forward to joining you next week in another instalment of the Netwealth Investments Series Podcast. Have a great day, everyone. Thank you.