Spectrum Insights – Skid alert!
When China attempts to rein in its bloating financial landscape, Australian investors should brace themselves for the risk of a fall out. Trying to tame China’s extreme corporate leverage is akin to tapping on your car’s brakes while driving on an icy road. Tap too hard and you can lose control. The risk of an unintended slowing of Australia’s largest trade partner has jumped as the cost of borrowing in China rises. At the same time, valuations in many risk asset classes, including corporate bonds, look near full value. At Spectrum, we believe the current risk-reward trade off favours tweaking the investment risk dial towards conservative mode.
Read the full report here: Spectrum Insights – Skid alert!