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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.
Using thematic investments
Thematic investing offers exposure to some of the major socioeconomic, environmental and technological themes of our times. It has increased in popularity over the years and is now more accessible than ever with an abundance of managed investments to cover a range of themes and trends. With clients increasingly interested in using them, how do you incorporate thematic investing within their portfolios?
WHAT IS THEMATIC INVESTING?
Economic Recovery and Factor Performance
As investors, we are rarely given the twin tailwinds of cheap valuations and a supportive economic environment. The current rotation out of growth into value securities is a sign of the recovering global economy, and one that every government and central bank would like to see continue for some time yet.
The recipe for successfully advising on sustainable investments
In the past 12 months we’ve seen a rising tide of interest in sustainable investments – once considered niche, now many investors, and a growing cohort of financial advisers, acknowledge that funds and assets which take environmental, social, and governance (ESG) factors into account have become mainstream. Moreover, they are noticing that sustainable investments are performing in line with, or better than, regular investments.
CGT relief options for small businesses
Many considerations come into play when a business owner is looking to dispose of business assets as part of their retirement planning. Matters that typically need to be considered include:
1) Managing any capital gains tax (CGT) resulting from the disposal of the business assets, and;
Using managed accounts in your advice proposition
Russell Investments’ annual 2020 Value of an Adviser report found that the tax-effective investing benefit advisers provide to clients could add at least 1.5% p.a. to a client’s returns – representing a significant part of the overall value advisers deliver to clients.
Tax has often been viewed as the realm of accountants. However, many advisers provide expertise on managing and optimising investment tax and do so with the help of managed accounts.
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