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The protection equation
As the memory of a retirement funded by a 'risk-free' investment in bank term deposits fades into history, the current generation of retirees must come to grips with the challenge of maintaining income over a much longer retirement period than the generations before them.
And as advisers know all too well, in the context of delivering sound (and safe) retirement outcomes, with interest rates close to zero, traditional sources of safety and protection for capital have been turned on their heads.
ESG credentials and strong returns
For some time now, strong credentials in environmental, social and governance – ‘ESG’ to use the shorthand – have been the buzzwords on every investor’s lips.
It would seem that everyone now wants to make investments in companies with strong ESG scores, with asset managers wanting to offer investments that stand up to ESG scrutiny. But there can be no denying the suspicion that ESG investments may not be able to keep pace with ‘traditional’ investments.
Identifying 'transition winners' in a disrupted economy
We no longer live in an era of short-lived industrial cycles driven by the dynamics of manufacturing and the management of tangible capital. Today, we live in an era of long-term transitions in the key value chains of the modern economy, usually starting with a disruption that has an impact across several different industries.
Using property in an SMSF
Real property investments continue to be a popular investment for self-managed superannuation funds (SMSFs). The latest Australian Taxation Office (ATO) SMSF statistics (as of 30 June, 2019) found non-residential real property investments accounted for 9% of all SMSF investments by value, making it one of the top five asset classes held by SMSFs. Residential real property accounted for 4.8% of all assets by value.
Investing in closed-ended trusts
Premiums or discounts to intrinsic value are a normal and inherent part of the successful functioning of listed markets. As with any listed shares, investors in Australian Securities Exchange (ASX) listed closed-end investment funds (commonly known as listed investment companies/trusts) should appreciate the opportunities and risks that this creates.
What happens when an investor buys/sells shares?
The role of top-down analysis in responsible investing
There are two approaches to responsible investing, top-down and bottom-up, writes Angela Ashton, but how they do differ and is one preferable to the other?
Alternative property exposure
Traditionally, income plays an important role for Australian investors. With global interest rates at all-time lows, investors are having to search harder for alternative investments that will help them achieve a consistent and reliable income to fund their lifestyle and retirement.
And when low rates combine with increased fiscal stimulus to cause asset price inflation, investors’ effective yields are eroded further.
Super changes from the Budget
Continuing to provide for a safer environment and incentives to increase spending by taxpayers to stimulate the economy remained a consistent measure and is in line with the October 2020 Federal Budget. Whilst many measures had been announced prior to the formal delivery of the 2021/22 Federal Budget, there were a number of additional measures released that have the potential to impact on the wealth plans of a number of Australians.
EOFY strategies, tips and traps
With the end of the financial year fast approaching, it may be the time for financial advisers to review certain strategies and ensure their clients are maximising opportunities. The following article provides a summary of common end of financial year (EOFY) opportunities, highlighting the potential tips and traps that are worth considering.
SUPERANNUATION
Maximise concessional contributions – concessional contributions (CCs) are capped at $25,000 for the 2020/21 income year and will be indexed to $27,500 from 1 July, 2021.
The building blocks of a portfolio
Most advisers and their clients would agree that a key aim of investing is that over time, returns will beat the rise in the cost of living (after fees and taxes).
In addition, it is important to try to minimise the risk of permanent capital loss. This isn’t mark-to-market losses driven by sentiment and noise, but losses that arise from a permanent diminution of business value.
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