00:00What are investors and clients asking you about at the moment?
00:04There's a lot on their mind as you can imagine Heidi and thank you. It's lovely to see you again
00:07at the summit.
00:09It's really driven by a lot of uncertainty that we're seeing in global markets.
00:14So from inflation to interest rates, obviously geopolitical risk.
00:19So the real question they're asking is how do they protect their wealth?
00:22How do they build a portfolio that is resilient and helps them manage through this uncertainty and market volatility?
00:28So let's tackle through those big themes one by one.
00:31When it comes to AI, is it more about how do we get exposure to this opportunity?
00:36How do we get into the SpaceX IPO, for example?
00:39Or is it also how do we get protection from perhaps overheated valuations?
00:46Yeah, absolutely.
00:47So obviously the AI thematic is significant and one of Morgan Stanley's thematic investing themes.
00:53So for us, the clients are absolutely, they're looking at it in a number of ways,
00:57whether it is through the investment directly into large cap technology stocks,
01:01but more importantly across the whole AI ecosystem.
01:05So it's not just those bigger names.
01:07It's semiconductors, it's data centers, it's energy and infrastructure.
01:10It's the whole ecosystem.
01:12Private markets, as you can imagine, is playing a really big role in that as well.
01:17So, you know, for our clients, they want to get earlier access.
01:20And the way of doing that is through private equity or venture capital who are funding this innovation.
01:26When it comes to the public listings, SpaceX, obviously more to come, open AI and profit.
01:32Are you imagining that the Australian investors will be a part of that?
01:36Are you getting a lot of demand and interest?
01:37It's definitely significant interest.
01:40I mean, I think that's representative globally.
01:42So the AI thematic is real.
01:45It's not sort of a question of whether it is going to be a real thing.
01:49It is broad spread adoption across enterprise.
01:52So it's really how do you gain exposure?
01:55Is it through those IPOs?
01:57Is it through private markets?
01:58Is it through other managed funds?
02:00So there's multiple ways they can gain exposure.
02:03When it comes to some of the other things that are going on, even just today, the worsening
02:07of geopolitical tensions between the US and Iran, are you also seeing a lot of that concern
02:12in terms of how the parts of their portfolio that might be affected by economies that are
02:17going to be either directly or indirectly affected by this ongoing conflict?
02:20How do you risk manage that?
02:22Risk management is the key.
02:24It's about being really disciplined and selective.
02:27So Morgan Stanley still remains very constructive around global markets and the macro thematics.
02:32So we do think that it is constructive for equity markets.
02:36But then it is about being more selective, really exposing yourself to the thematics like
02:41the AI, capex cycle and other structural tailwinds.
02:46So earnings growth in the US, for example, and Japan.
02:49So they're sort of our more direct focus.
02:52Equities are still a key component, but they're also looking at other asset classes to broaden
02:56out their risk management strategies.
02:59Domestically, are you seeing much of a reaction to the budget changes when it comes to capital
03:03gains?
03:05Is there likely to be kind of a shift away from property allocation in portfolios now?
03:08Yes.
03:09And I mean, obviously, that's a very topical conversation for our Australian clients.
03:12So it does have an impact and it does change the investment tax framework.
03:17So, obviously, Australian wealth has been built through the property sector over many decades.
03:22And we are expecting to see a shift from that property investment to potentially more higher
03:28growth being sought either in equity markets here or offshore.
03:32The other structural element is just the sheer dominance of super funds when it comes to flows,
03:38right?
03:38Are you seeing kind of individual investors having to fight for more relevance in these markets?
03:44Yes.
03:45I mean, they've obviously played a very significant part of the Australian market.
03:49So, look, I think the wealth investors and retail investors also play a significant role
03:54in public markets.
03:56And we're going to see that also in capital markets going forward.
03:59We've also seen Morgan Stanley allowing wealth clients to buy shares in unlisted U.S.
04:03companies.
04:04I'm curious, has there been a big uptake in that?
04:06Yes.
04:07I mean, definitely, Australian investors are much more sophisticated in where they like to invest.
04:12So, the U.S. and playing some of these key thematics has been very important to our clients.
04:17Is it almost more exciting, I guess, than the domestic market?
04:21Look, I think it does offer a unique sort of opportunity.
04:25The private assets are more uncorrelated to the public markets.
04:29So, it allows a bit more on the risk management side and diversification and also yield enhancement for them.
04:35Yeah.
04:35Are there untapped AI-adjacent, hyperscaler, infrastructure-adjacent opportunities, unlisted opportunities,
04:42in the Australian market that perhaps we don't really talk about right now?
04:46Yes.
04:47I mean, I think we're going to continue to see that evolution as, you know, we continue to see this
04:52thematic grow.
04:53There are many different parts of the adjacent ecosystem that I am sure are going to be available to investors.
05:00What about the broader rate environment, particularly for financials and banks?
05:05Have you seen a flow in reallocation as a result of what the RBA is doing and how inflation continues
05:12to remain above target?
05:14Yes. I mean, I think, you know, inflation is, in Australia, well, viewers, it will remain sticky and elevated probably
05:20into next year as well.
05:22So, obviously, that does weigh on the financial sector.
05:25So, you know, again, it is looking for different opportunities that can act as a bit of an inflation hedge.
05:31And infrastructure, for example, is an opportunity that does, within a portfolio, give that inflation hedge.
05:38What do you think the biggest risk is for private wealth right now?
05:41I think it is ensuring that they are able to manage through this volatility and still be able to preserve
05:49and grow their wealth.
05:50So, I think that is sort of the main thing that is topical.
05:53And the other piece is what we do talk about, the intergenerational wealth transfer, a much longer trend, but we
05:59have started to see the beginning of that.
06:01And, you know, it is a significant headline number, but the next generation are absolutely approaching sort of their wealth
06:07in a much more active way,
06:09rather than necessarily just the passive growth of their wealth.
06:12The first day of the multibat lug and Juan Marshawn on the last year as 7 years,
06:12That say there were much more like 740 looks its biggestoral ones?
06:12It was they 197.
06:13I've been in the last week when you came up against three Southern locations.
06:13Do you know how webinar isam theять to come when it's 70%.
06:13But right when in the university is the first course of 길,
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