31 March 2021
A shot in the arm for the economy?
As we welcome 2021, Covid-19 remains front-of-mind given the economic damage inflicted last year as governments scrambled to flatten the infection curve. Read more
21st December 2020 - Asset Management
We recently wrote about the ongoing pain for savers, given the likelihood of very low cash and deposit rates going forward. Unfortunately, this outlook has been reaffirmed by the latest RBA announcements.
Having realistic expectations about future total returns is however something even investors with diversified portfolios need to have. This is especially true if your reference point is what the average diversified portfolio has earned over the past decade.
The reason for this is simple – the return on an investment consists of capital growth and income.
Currently the income earned on defensive assets, cash and government bonds in particular, is at near record lows. At the same time, the expected dividend yield from domestic equities is the lowest it has been in years, albeit much higher than most other asset classes. It is also expected to improve as the economy recovers.
As for the capital growth potential from equities, this is likely to be constrained relative to the past, given current valuations both domestically and abroad. While further multiple expansion can’t be completely ruled out, this is unlikely to contribute to returns over the next ten years.
As for bonds, their prices move inversely to yields. Declining yields have been a massive tailwind to bond total returns, something unlikely to be repeated given ultra-low yields now.
So when will good returns return? With low income, muted inflation and constrained growth it could be a while yet.
If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.
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This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.
31 March 2021
As we welcome 2021, Covid-19 remains front-of-mind given the economic damage inflicted last year as governments scrambled to flatten the infection curve. Read more
25 March 2021
23 March 2021
Published on Alan Kohler’s Eureka Report
Founder & Portfolio Manager of Elston, Andrew McKie, discusses its large-cap focus & which stocks he likes in the ASX50. Read more
1 March 2021
Published on Livewire.
In this video, Andrew explains why he is ultra-bullish when considering the next three years for large-cap Aussie equities, the sectors he believes are positioned best to ride the recovery, detailing his preferred travel play and provides his thesis for the one ASX company that is still undervalued despite its stellar run. Read more
23 February 2021
Published on Livewire.
February is one of the most anticipated months of the year. Not because of Valentines Day, Chinese New Year or even the hot weather. No, February is the month to watch for Australian investors as reporting season kicks off. Read more
11 January 2021
Published on Livewire.
Leon de Wet shares the values he and his team have learnt from both the GFC and the COVID-19 financial crisis, as well as the opportunities that he sees in large-cap Aussie stocks for the year ahead. Read more
21 December 2020
We recently wrote about the ongoing pain for savers, given the likelihood of very low cash and deposit rates going forward. Unfortunately, this outlook has been reaffirmed by the latest RBA announcements. Read more
17 December 2020
Ramsay Health Care (ASX: RHC) is a global health care company with a reputation for operating high-quality services and delivering excellent patient care. Ramsay facilities cater for a broad range of health care needs from primary care to highly complex surgery, as well mental health care and rehabilitation. Read more