We see Australian equities as a key component of many investors’ portfolios. Over the longer term (five to seven years) we believe Australian equities may generally provide investors with higher returns than other asset classes such as cash or fixed income.
In addition to the potential for capital growth, many Australian equities generate income in the form of dividends. They may also offer investors tax advantages through franking credits. This can reduce your clients’ overall taxable income depending on their individual situation, as well as discounts on any capital gains if they are held for more than 12 months.
Flexibility to target capital growth, income or a combination
Tax advantages including franking credits
Significant opportunities for active managers to add value
Risks specific to investments in Australian equities
Risks specific to investments in Australian equities may include share market and company risks, risks associated with the use of short selling and derivatives, investment management and style, portfolio concentration and liquidity risks. Please refer to the relevant fund’s Information Memorandum or Product Disclosure Statement for more information.
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In more normal times, after a huge rally where the market has gone through its prior peak in just five quarters and the emergence of a new more virulent Delta variant of COVID-19 causing lockdowns across the Australian East Coast, you might be forgiven for thinking the market might pull back.
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