'Perspectives' by Escala

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, discusses the seismic shift in German defence spending, why Greek banks are looking attractive and why the team are no longer happy to be overweight US equities.

(1:10) Tracey for decades, Germany has been the poster child of fiscal conservatism in Europe. The country's approach was shaped by its post-WWII economic memory, where inflation and debt were deeply stigmatized. The past few weeks has seen a seismic shift in that view.

(1:55) It was a historic shift in Germany's fiscal policy.

(2:49) Still, it means some significant government spending in Germany. What does it say about NATO?

(3:51) So is this another cold War?

(4:27) The Australian Government bought down its budget last week. Did defence spending get a boost?

(5:21) Let's turn to trade policy—specifically tariffs. Today is Liberation Day – the day the Trump administration is expected to announce the most aggressive pivot in U.S. trade policy in decades. There's been a lot of headline noise, but break it down for us: how are U.S. companies actually being affected on the ground?

(6:15) That's massive. What are companies doing in response?

(7:49) So even "Made in America" isn't immune? The idea of a 100% "Made in America" car does not exist.

(9:19) What about everyday consumer brands?

(10:09) So inflation is coming back through the trade channel?

(10:30) What about smaller companies? How is all of this affecting them?

(11:47) So what are the smart companies doing right now?

(13:32) That's a pretty tough landscape. Are there sectors that are less affected by these tariffs -maybe even thriving?

(14:48) What are some other examples of more resilient sectors?

(15:38) So it is the defensive sectors plus financials and real assets that will likely be the most insulated – at least in a relative sense. The countries whose equity indexes are highest in these sectors are the UK, Europe and Australia.

(15:56) That brings us to an important decision that came out of our investment committee last week. You've announced the closure of your overweight position in US equities relative to Australian equities. Walk us through this decision?

(16:48) That sounds logical. So what changed?

(17:38) Tariff induced inflation pressures may prevent the US Federal Reserve cutting interest rates as much as expected. Further undermining the case for US equities.

(17:58) Tracey it's clear we're navigating a period of substantial global change. What advice would give to investors right now?

In this episode, Escala Partners Investment Analyst Stephen Dickinson talks to Sam Edwards, Partner from Longreach Alternatives. Sam discusses the royalties landscape, why a diversified approach to royalty investing is important and the benefits of PG3s multi-sector approach to royalties.

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, discusses what a multi-polar world might look like, NATO's fragile state and how the world trade map is being re-drawn.

(1:30) It has been easy to get stuck in the weeds over the past 57 days, since President Trumps inauguration, so lets take a helicopter view and talk about US exceptionalism. For decades, the US has been the dominant force in global politics, economics, and military power. But today, we're seeing cracks in that dominance. How do you see this playing out?

(3:08) Interesting. And politically, are we seeing a decline in soft power?

(4:05) So, does this mean the US has reached peak superpower status?

(4:31) What does this multipolar world look like?

(8:10) Okay, so we have these competing power centres. What does that mean for global stability and for investors in general?

(10:44) So what's your biggest takeaway about the multipolar world we're entering?

(11:35) Its truly fascinating. The shift from a unipolar to a multipolar world is one of the biggest geopolitical changes of our time, and it's happening faster than most people realize.

(11:46) That brings us to NATO. The alliance that defined the Cold War and kept the West united for so long through so many challenging times - could we really be seeing its end? Gerard Minack, our Independent Investment Committee member said it is not dead yet but it is on life support.

(12:50) But hasn't NATO expanded recently? Finland and Sweden are joining—doesn't that strengthen the alliance?

(13:31) So, if NATO were to dissolve or become irrelevant, what would the world look like? What would take its place?

(14:51) Alright, let's shift our focus to something that affects not just governments and corporations but everyday people - the ongoing tariff and trade war. This conflict is now reshaping global supply chains in profound ways. We've seen waves of tariffs, retaliatory measures, and efforts to decouple economies. How is this reshaping global trade, and what does it mean for businesses and consumers?

(17:20) Okay, so tariffs didn't quite work as planned. But how did they affect global supply chains?

(18:27) With this new reality taking shape, who are the winners and losers?

In this episode, Escala Partners Investment Analyst David Bruty talks to Justin O'Brien, Portfolio Manager of the Cooper Investors Brunswick Fund, an all-cap Australian equities fund. Justin discusses the investment philosophy that underpins Cooper Investors' approach to managing capital, the differentiated and unconstrained structure of the Brunswick Fund, along with a number of stock examples and the role they play within the portfolio.

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, interviews Mark Middleton, CEO of Icon Group. Mark discusses his journey as a founder of one of Australia's largest health organisations, his partnership with private equity and the importance of authenticity as a leadership quality.

Mark is the author of 'Good Morning', with all proceeds going to the Icon Cancer Foundation, a registered charity dedicated to providing hope, access and opportunity to people with cancer through supporting research and clinical trials. Find out more: Good Morning: How a crisis delivered inspiration to lead — Icon Group

Live on stage at our Agenda 2025 client event, Escala Partners CIO, Tracey McNaughton, is in discussion with Gerard Minack from Minack Advisers. Tracey and Gerard discuss prospects for Europe following the German election, implications of a peace deal between Ukraine and Russia, what the trade war means for growth and inflation and why Australia is so hard to love right now.

This week Escala Partners CIO, Tracey McNaughton, reflects on what has been a blistering start to the year. President Trump is setting records with the number of executive orders he creates; tariffs are creating uncertainty and DeepSeek is disrupting. It's enough to make your AI Agent's head spin.

(1:03) Tracey, we're 18 days into the new US administration and no fewer than 48 executive orders have been issued. That has to be a record, doesn't it?

(1:46) Tracey, occupying a lot of the market's attention at the moment is tariffs, and so far few of the threats have actually been implemented with tariffs on Mexico and Canada delayed for a month. Although the 10% tariff on China came into effect on Tuesday this week. But how are you thinking about this, and how impactful will it be?

(3:56) Tracey, is it physically possible for all this manufacturing to come back on shore in the US?

(6:03) Tracey, still a lot of unknowns with regards to tariffs. So let's move on to something slightly more certain. It's AI – and why is this Chinese company 'DeepSeek' in the news so much?

(7:56) Tracey, what does this mean for investors?

(11:23) So, Tracey, we've spoken about this on our morning meetings. But what kind of AI applications are we talking about, and how will they make money for the user?

(15:27) Tracey, you mentioned earlier Agentic AI? Now, what is that? And is it the next big thing?

In this episode, Escala Partners Investment Analyst Stephen Dickinson talks to Craig Balenzuela, Managing Director within Goldman Sachs Asset Management Alternatives and Private Markets Client Solution Group. Craig discusses the growth in the private credit landscape, the implications of the changing macro environment for private credit and why not all private credit is made equally.

In this episode, Investment Analyst Darragh Kennelly talks to James Tsinidis of Munro Partners to discuss the role of nuclear power in the energy transition and the growing demand for reliable baseload power especially from some of the worlds largest tech companies. They also discussed the benefits of nuclear power and the key components of the nuclear sector to consider.

Important Information

The information contained in this podcast reflects, as of the date of publication, the views of Munro Partners and sources believed by Munro Partners to be reliable. There can be no guarantee that any projection, forecast or opinion in these materials will be realised. The views expressed in this podcast may change at any time after the date of issue.

This week Escala Partners CIO, Tracey McNaughton, reflects on playing the long game with Carol Geremia, President of MFS Investment Management. Passive investing has gone from 6 to 60% in the past 30 years. Investment horizons have fallen from 5 years to 5 months. What are the consequences for investors, fund managers and corporations alike? And what is the one thing a good leader must have?