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Super fees still too high, but change is on the horizon: Research
Superannuation fees can add up to a huge long-term expenditure, costing Australians with modest super balances thousands of dollars a year. But costs may start to fall, with some funds and new players working to disrupt the structure.
Wealth hits record high, but wealth gap widens even further
While Australian household wealth is hitting new records, research shows much of it is held by just a few people, with the richest 5 per cent of Australians seeing their assets grow in value by 86 per cent over the last 20 years.
Banks hold out as soaring costs force Aussie blue chips to cut dividends
Australian companies’ dividend payouts are down 24 per cent from a year ago, as higher interest rates and cash flow challenges darken the outlook. Payouts from miners decreased significantly, although the dividend picture remains positive for banks.
Weak consumer spending a sign that interest rates have peaked: Economists
Australian consumers are showing real signs the largest and longest rate hiking cycle in 30 years is starting to bite. It might be the proof the RBA needs to see that its fight against inflation is working, adding further weight to the theory that rate rises are behind us.
Consumer discretionary strength drives upbeat reporting season
Companies were largely able to pass cost increases on to the surprisingly resilient Australian consumer, allowing them to defend profit margins, while retail continued to defy analysts’ expectations of a downturn.
Despite looming tech fears, some say sky’s the limit for Nvidia
Brokerages raising their target price on Nvidia shares this month have pushed the median view to US$500, and analysts say that may be conservative. After an impressive earnings report, hedge funds and others are piling into the chip maker even as high bond yields threaten tech stocks.
Rate hike forecasts simmer down as employment and wage growth numbers soften
Recently released wages data increases the likelihood the RBA will pause its rate hiking campaign for the near term, economists say. A soft landing for the economy is far from guaranteed, but the runway is getting clearer.
ATO gets serious about data, warns taxpayers against income mismatches
The Australian Taxation Office has extended its data collection to more rigorously check numbers in FY23 tax returns and cut down on tax cheats. Advisers and their accountants are passing the message onto taxpayers.
Rate hikes and mortgage stress will lead to increase in distressed selling: Analysts
Rate hikes are causing anxiety for Australian mortgage holders, with new research showing seven out of 10 worry about missing repayments. As large numbers of fixed-rate mortgages expire, analysts say distressed property selling is likely to pick up from its thus-far benign levels.
Rosy outlook for corporate earnings may turn out grey
Corporate profit growth is expected to moderate, especially in sectors focused on consumer sales, and mining companies have seen large downgrades. Meanwhile, markets are still not fully pricing in the high risk of recession, some analysts say.
An abundance of value, or is the market just presenting more value traps?
High payout ratios and non-cyclical price falls are some of the red flags investors need to be wary of. A selection of portfolio managers reveal what they look out for, and try to avoid, when hunting for value stocks.
SMSF trustees lack diversification, still underweight international shares
With new data showing offshore share investments comprise just 2 percent of total self-managed superannuation fund assets in Australia, advisers are warning SMSFs against overreliance on domestic shares and cash and urging diversification.
Defence overtakes offence as portfolio managers seek shelter with recession likely
As the economy tilts toward recession, portfolio analysts are turning towards sectors and companies that handle cloudy conditions better than most. Healthcare, energy, consumer staples and utilities come into focus, while cyclical sector companies lose favour.
US shares outperform, but analysts doubt rally will continue
True to form, US stocks are outperforming Aussie shares on the back of a resurgence in technology-related company valuations. Economists warn against straying from diversification, however, with Aussie miners still offering investors capital returns on top of an underlying hedge against a US downturn.
Sophisticated investor test draws scrutiny in financial services inquiry
The test allows investors who can certify that they earn $250,000 a year or have more than $2.5 million in net assets to access higher-risk securities normally off-limits to individuals. But many say the test is confusing and outdated, and an independent statutory body has called for an update.
Long term demand for lithium can only go one way: Analysts
For the world to meet climate targets, the supply of battery-grade lithium will have to ramp up greatly, prompting expectations that the price will keep rising for years to come. And Australian companies with proven lithium deposits could do well as M&A in the sector stays hot, analysts say.
‘Neither simple nor fair’: Super stakeholders push back over unrealised gains hurdle
While the move to tax superannuation balances above $3 million at a higher rate would affect only a handful of people at first, if the threshold is not indexed to inflation, future generations may be turned off from investing in their super, industry leaders say.
Term deposits set to reach peak attraction as hiking cycle crests
The average annual interest rate on banks’ one- and three- year term deposits has risen to 3.2 per cent from 0.25 per cent over the past year. With markets expecting the official cash rate to peak soon, savers looking to lock in attractive rates will find the best deals with smaller, newer banks, analysts say.
Dividends down in 2023, but energy, bank shares still paying big
Although more Australian companies are paying dividends in 2023, many have reduced payouts, with the year-to-date total slightly behind 2022’s figures, according to CommSec research. The big miners are leading the cuts, while energy producers are lifting dividends to reflect record high gas prices.
Tech sector soars as bond yields and banks fall
Despite increased volatility emanating from the banking sector, tech stocks have been supported by falling bond yields on fears the global economy could slip into recession this year, with big-name companies leading the gains.
Managed fund levels head back toward record highs as returns improve
Growth in superannuation drove Australia’s managed fund industry to near-record levels in the December 2022 quarter. While most asset classes delivered positive returns and Australian equities outperformed, investors are looking more to offshore assets for portfolio diversification.
In falling markets, dollar-cost averaging can help reduce exposure
Dollar-cost averaging allows investors to be in the market for the good days as well as the bad. This can help reduce exposure to market declines, as recent research shines light on the difficulty of timing the market.
All bets on Nvidia as AI tools gain popularity
While advisers are not yet seeing substantial client demand for semiconductor and chip stocks, the popularity of the AI chatbot ChatGPT has highlighted opportunities for Australian investors to gain exposure to the surging sector.
Term deposit rates rise, but savers need to shop around
As the RBA’s rate hiking campaign appears to approach its peak, investors looking to lock in term deposits should shop around to find the best rates, analysts say, warning that the complacent risk missing out.
High quarterly CPI print complicates inflation outlook
Highly anticipated new consumer price data showed the inflation rate in Australia hit its highest level since 1990 in the December quarter. But analysts are mixed on whether inflation will moderate later this year or become more entrenched.
Advice benefits becoming clearer to the masses
Studies highlight just how much the benefit of financial advice is filtering into the public consciousness. After the pandemic, and with inflation soaring, the emotional upside of financial guidance is finally becoming clear.
Private equity opportunities may offer recession buffer, with some risk
Despite its lack of liquidity, PE’s popularity in the institutional and wholesale market is set to filter into the retail market with more fund managers offering a conduit to access the burgeoning sector.
Investors revisiting 60/40 split as slowdown threatens share returns
The traditional 60/40 portfolio mix of shares and bonds may be due a shakeup in 2023, as market participants look to add fixed-income exposure to help offset a potentially weak year for equities.
Higher rates biting into household wealth, with more pain to come
Household wealth in September recorded its third largest quarterly decline since the Australian Bureau of Statistics began keeping records in 1989. And wealth is likely to keep falling in the coming quarters, as the lagged effects of interest rate hikes flow through.
Lifecycle super funds not aligned with investment mandates: APRA
Superannuation funds are more commonly offering ‘lifecycle’ investment options that adjust with a saver’s age. But a recent paper by the superannuation regulator highlights that some of these funds aren’t sticking to their mandates.
New funds offer wholesale access to infrastructure investments
Increasing government expenditure on social infrastructure is driving huge levels of investment into the sector. There are now several options for retail and wholesale investors to gain exposure to this asset class, which was previously open only to institutional investors.
Next gen platforms surge while adviser FUA doubles
Netwealth and HUB24 are expected to continue eating the incumbents’ lunch, according to UBS. Meanwhile, as adviser numbers have halved the average amount of money they manage has doubled.
Share falls and higher rates bite into superannuation balances
Australians should be putting more money into superannuation and diversifying out of property, some say, even as super performance remains a question mark.
RBA offers excuses on inflation, still insisting it’s temporary
The Reserve Bank of Australia is sticking to its view that inflation will be temporary, despite its poor forecasting track record. Economists aren’t so sure.
Economic growth to slow, real wages to fall as budget blows out
Inflationary pressures are expected to ease over the next six months according to federal budget forecasts, while consumer-focused and housing stocks could benefit from government policies aimed at boosting consumer spending and the availability of affordable housing.
Report demands greater transparency on de-banking
A new report has identified “blanket de-banking” of certain sectors, and reminded the banks that commerciality must be balanced with corporate social responsibility.
Budget expected to maintain tax cuts, leave super alone
Experts forecast a more balanced budget with an even-handed dispersion of revenue and spending measures. Income tax cuts will likely go ahead, while super should get a break from further tinkering.
RBA raises rates again, but end may be in sight
More rises are likely to come but analysts say a confluence of factors may cap the official rate at around 3.1 per cent in 2023, providing relief to Australian households.
Clean power drops in price, value seen in stocks
Wind and solar are gauged as the cheapest sources of electricity generation and storage in Australia, with technology costs trending in the right direction for investors.
Higher rates to erode Aussie wealth levels
As interest rates creep north, advisers extoll the virtue of investing away from the family home and into a diversified suite of assets.
Super fees climb with age, but devil is in the detail
There are a range of factors that will determine the fees a member will pay. The difference could have a dramatic effect on the final balance of a retiree’s nest egg.
Super funds pass performance test, but at a cost
Funds have adapted to the test’s metrics, but the consequent risk aversion could put the industry in “limp mode” and curb performance.
Infrastructure companies deliver the goods
Listed infrastructure companies provide a powerful hedge against inflation.
Holes revealed in new fund disclosure regulations
Morningstar has released a research paper citing how “abysmal” Australia’s portfolio holdings disclosure requirements are for superannuation funds.
Local dollar’s slide prompts hedging question
The Australian dollar could fall to US65 cents by the year’s end as higher interest rates in the US and capital inflows push the US dollar higher.
Hostplus claims top spot for super returns in 2021-22
Research houses and Chant West and SuperRatings have released lists of the top performing superannuation funds for 2021-22, and leading both lists is Hostplus’ Balanced fund.
Fixed mortgages cliff coming, economy could slow
As fixed mortgages expire in Australia, households will be hit by higher interest costs on variable mortgages which will threaten consumer spending and economic growth, according to new research.
Private wealth seen as significant area of jobs growth
Advancing technologies, the explosion of ‘big data’ and greater regulation are changing the shape of financial advisers in the investment industry,
Share market tipped to gain in 2023 after fall in 2022
While share prices have fallen this year, Australian companies remain well-cashed-up and profits sit at record highs, which will help to drive gains next year, according to the research house.
Global asset portfolios to deliver 5% a year: BCA
New research from BCA Consulting predicts Australian equities will outperform global equities over the next 10 to 15 years.
Hit to retirement savings expected in 2021-22
As share markets fall, superannuation research houses are predicting a negative financial year for both balanced and growth superannuation funds.
Hit to banks to come from higher rates
Following the Reserve Bank of Australia’s decision to increase the cash rate by 50 basis point this month, the big banks have quickly raised interest rates on their mortgages, as well as interest rates on some savings accounts.
Block survey reveals Aussies relatively optimistic about Bitcoin
Too much volatility and an uncertain regulatory outlook are the most common reasons for people to avoid Bitcoin, though Australia ranks higher than the UK, Italy, Germany, Canada and France in terms of optimism about the cryptocurrency, according to the 2022 Block Bitcoin Survey.
ATO draws up hit list for 2021-22 tax returns
The Australian Taxation Office has warned people not to make the mistake of double-dipping their deductions in their tax return this year after identifying this as a common problem, especially in relation to work-related expenses.
Level of managed funds dips from record high
Australia’s managed fund industry shrank in the March quarter of 2022 from the December 2021 quarter to $4.48 trillion
House price weakness may limit rate rises
The central bank expects house price growth to ease this year and house prices are already falling in Sydney and Melbourne; economists expect that price weakness will spread to other cities, which may limit the number of official interest rate rises this year that are needed to tame inflation. According to the Reserve Bank of […]
Active v passive debate more relevant than ever
As global share market volatility becomes the norm, active fund managers argue their expertise is needed to help protect against losses and deliver robust investment returns as the times get tougher and asset price growth weakens or disappear
SMSF numbers jump, top industry fund growth in 2022
The lockdowns of 2021 and a trend for younger people to set up a self-managed superannuation funds (SMSFs) have driven a sharp growth in the number of funds being established in Australia with assets their assets under management (AUM) now approaching $1 trillion.
Thematic ETFs drop like hot cakes
Funds into thematic exchange traded funds (ETFs) have dried up this year as technology stocks get hit globally.
Good time to buy quality semiconductor companies, say experts
For investors looking to build positions in quality technology firms, the US computer chip giants are trading at attractive price levels, with many brokers now rating them as a buy, according to data from the Wall Street Journal.
Fertility rate set to rise, bond yields with it
Aging populations are putting strain on pension and health care systems and the Covid-19 pandemic, by causing people to delay births and pushing up the number of dependents, hasn’t helped.
Some market neutral funds don’t live up to promises
Amid ongoing elevated volatility, some financial advisers are recommending that investors hold alternative investments, including market neutral funds, which could help cushion portfolios against a broad market sell-off.
Superannuation returns hit by volatility
A bounce in share markets in March supported superannuation fund performance in the first quarter of 2022. However, with inflation concerns mounting, global share markets remain volatile, including the hard-hit US share market, which is likely to dent superannuation returns for the current financial year.
Analysts tip May rate rise as inflation soars to 21 year high
Several economists are now expecting the central bank will raise interest rates next week given a jump in inflation to a 21-year high of 5.1%, which would be the first rise in interest rates during an election campaign since November 2007, and coming ahead of several forecast rate rises in the second half of 2022. […]
Reframing advice with technology
According to a new report from EY, How will you reframe the future of advice if today’s client is changing?, the global market for wealth advice is poised for transformation, with a blend of people and technology delivering financial advice, but technology must be targeted and explained to clients in order to be successfully introduced. […]
Fund flows drop during first quarter market turmoil
Australian investors’ appetite for equities dropped in the first quarter of 2022, especially for international shares which have dropped more than Australian shares. Following record inflows to managed equity funds in 2021, the value of inflows between January and March 2022 plunged to $1.2 billion, falling from a quarterly average of $3.8 billion last year, […]
Factor performance in 1Q sees value outperform: MSCI research
MSCI has recently examined how different equity factors have performed since Russia’s invasion of Ukraine and found that stocks related to oil rallied alongside others that were metal-related. In terms of the broader economic environment, the value factor is expected to outperform in this period of rising inflation. Russia’s invasion of Ukraine in the first quarter […]
Super investments can make a big difference to climate
Superannuation investments can have a big impact on the climate, and superannuation funds are increasingly offering investors more climate-friendly investment options, which according to recent research can be more effective in combating climate change than changing our daily behaviours. The momentum for more environmentally friendly investments is rising. While the Association of Superannuation Funds of […]
Analysts see merit in Perpetual bid
Asset manager Perpetual has made a bold $2.4 billion takeover bid for asset manager Pendal, which it says would create a “leader in the Australian asset management market”, and analysts are upbeat on the deal, with some saying a higher bid could emerge. Perpetual has launched a conditional, non-binding proposal to buy 100 per cent […]
Aussie wealth surges to fresh high as asset values soar
Australians are the richest they have ever been, with household wealth jumping to a record $14.68 trillion in the December quarter of 2021, a rise of 4.5 per cent from the September quarter, while wealth per capita increased to an all-time high of $566,541, according to data from the Australian Bureau of Statistics (ABS). Almost […]
Managed Accounts FUM climbs with asset markets
Funds under management (FUM) in managed accounts jumped in the second half of 2021, with continued growth expected in 2022 through more volatile asset markets, according to new data from the Institute of Managed Account Professionals (IMAP). As at 31 December 2021, FUM in managed accounts stood at $131.65 billion, an increase of $21.06 billion […]
Population of ultra-wealthy surges worldwide
Last year’s global economic rebound, combined with increases in the prices of shares and property, have boosted the number of ultra-wealthy people worldwide, with their number rising at a faster pace in 2021 than in 2020, despite the lingering Covid-19 pandemic. The number of ultra-high-net-worth individuals (UHNWIs), or those with US$30 million ($40 million) or […]