'Perspectives' is a bi-weekly investment podcast brought to you by Escala. In a world cluttered with information, 'Perspectives' cuts through the noise to bring you insights and commentary on global financial markets, economics and geopolitical news and events. Hear our most up-to-date views straight from the Escala Investment Committee meeting room and learn how the CIO team incorporate macroeconomic views, central bank thinking and government policy into actionable investment ideas for our clients.
As an economist and seasoned practitioner with both domestic and international investment experience, Escala CIO, Tracey McNaughton, shares her views and observations to help you make sense of today's investment landscape. Join Tracey, and others at Escala, as they discuss the big issues affecting your investment portfolio and interview industry-leading voices in wealth management. For more information visit: escalapartners.com.au
Perspectives: Episode 135 – Resilient Portfolio Construction
In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, talks about why we are not trying to build the portfolio that performs best if we're right. Rather, we're trying to build one that can still achieve its purpose when we're wrong.
(1:03) Do you think there's another shortage emerging that investors probably aren't thinking enough about?
(3:09) Japan still owns roughly US$2.4 trillion of overseas debt. So nobody is suggesting Japanese institutions are suddenly going to dump that portfolio and bring the money home, are they?
(3:49) But presumably Japan isn't the only reason yields are rising?
(5:16) Since the risk-free rate sits underneath almost every asset valuation, this rise in bond yields, the rise in bond yields is becoming an equity market story as well.
(6:23) We've talked about the price of capital. But you had an interesting question from a client last week which takes this discussion in a slightly different direction. That's the location of capital.
(8:09) But gold is gold, so why does it matter whether it's sitting underneath New York, London, or Amsterdam?
(9:01) So this is not just a gold story, is it? I remember during the GFC, it was important to know which bank kept your savings because some of those banks were ring-fenced by the government, but others weren't.
(10:24) This is almost precisely the philosophical change we've been making in our new asset allocation methodology.
(12:13) One of your strong criticisms of the traditional way we label assets in a portfolio is the label itself. What do you mean by that?
(13:22) How does your methodology deal with that?
(14:34) And what would today's discussion change?
(16:53) That sounds less like optimization and more like engineering, doesn't it?
(17:38) But presumably there's a cost to doing that
25 Aug 2026
Perspectives: Episode 134 - Ride to the Conditions
Perspectives 134 – Ride to the Conditions
In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, looks at the changing conditions facing investors, from persistent inflation and a stronger Australian dollar to rising government debt and the return of fiscal discipline.
(0:44) Tracey, we spend a lot of time talking to clients and advisers about what is happening in markets, but I thought today we might turn that around a little and talk about what they are asking us.
(3:13) You think there are good riders and bad riders in markets as well?
(4:36) So how do you tell the difference between a good investor taking risk and a reckless investor who just got lucky?
(5:08) And presumably that means there will be times when the more reckless investor actually looks like the better investor?
(6:39) So what are the conditions around us today?
(8:04) Which makes inflation harder to get rid of because the constraints on supply negatively impact growth.
(9:34) Let's move onto the Australian dollar. We've seen quite a move recently. In the last month and a half we have seen almost a 3 cent move higher. What's going on?
(10:21) US government debt has just passed US$40 trillion for the first time. It has doubled in roughly a decade and about US$3 trillion has been added in the past year alone.
(11:43) And we're seeing the bond market respond to that now. The US 30-year Treasury yield has recently been above 5.3 per cent, the highest level since 2007
(13;49) Are we seeing that happen?
(15;46) And presumably there's a feedback loop here as well. Higher yields make the debt problem worse.
(17:11) Meanwhile, back home, the Australian Commonwealth government debt hit its own milestone last week topping A$1 trillion for the first time.
3 Aug 2026
Perspectives: Episode 133 – Who's Paying for AI?
In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, discusses just how large the AI capital expenditure budgets have become, where the money is coming from, and which parts of the AI supply chain are most at risk of overinvestment.
(0:51) It feels as though every major technology company is announcing another massive increase in AI investment. Just how big has this AI spending boom become?
(2:00) What's interesting, though, is that the spending doesn't seem to be slowing. If anything, every earnings season the budgets seem to get bigger.
(4:10) Microsoft seems to have convinced the market that the investment is paying off. Was that true for everyone?
(5:58) For Alphabet and Meta, investors are still asking, "Show me how this next wave of spending turns into future earnings."
(6:57) If the hyperscalers are collectively spending more than US$400 billion this year, where is all that money actually coming from?
(8:38) Where does that capital come from?
(10:47) AI has become one of the world's largest consumers of investment capital. The unfortunate thing is this is happening at the same time as bond yields are hitting multi-decade highs.
(12:12) So, Tracey, whenever we see an investment boom of this magnitude, history tells us that eventually somebody builds too much. Is AI heading down the same path?
(12:49) Let's work through the supply chain. Where do you think the risks are highest?
(13:54) What about data centres – surely that's where everyone's worried about a bubble?
(14:41) What about the companies actually making the equipment?
(16:01) So, not all parts of the AI supply chain should be treated the same – particularly when we are talking about capex?
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Podcast Authority Score: 58 / 100
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88
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Engagement
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