Episode Details
Back to Episodes
7.3% Yields With Built-In Slowdown Protection: Inside Australia's Credit Market with Yarra Capital
Description
Rob Pizzichetta (Mont Wealth) speaks with Phil Strano (Yarra Capital Management) about the Australian economy, global macro, and portfolio positioning. Strano expects weak but non-recessionary Australian growth, supported by high immigration, with a per-capita recession possible, unemployment trending toward ~5% (potentially 5.5%), and inflation moderating naturally back into the RBA band around 2027. He anticipates the RBA adopts an easing bias by year-end and sees roughly three rate cuts over late this year and next year, though not a return to sub-1% rates. Globally, he cites headwinds from debt, aging demographics, geopolitics, and higher real yields, with AI capex a key tailwind. In credit, Yarra targets investment-grade quality yielding ~6–7.5% (higher income fund ~7.3%), discusses tight spreads amid higher government yields, and uses duration for defensiveness, noting recent drawdowns recovered and outlining multi-sector exposures across public and select private credit.
https://www.yarracm.com/phil-strano-yields-take-centre-stage-again/
00:00 Welcome and Agenda
00:46 Australia Rates Outlook
01:33 Growth Immigration and Jobs
03:35 Inflation Path and Cuts
05:44 Productivity Puzzle
06:32 US Rates and AI Boom
08:10 Global Headwinds Europe
09:39 Credit Yields and Strategy
10:56 Spreads Duration and Defense
16:12 Fund Performance and Exposures
17:43 Risks in Credit Markets
19:32 Wrap Up and Resources