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Saturday, 18 September 2021
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Company results in FY21 were generally good with some standout results from those thriving in tough conditions. We highlight the companies that delivered some of the best results and our future expectations.
The Australian market overall finished flat for calendar 2020, but the pandemic delivered big wins and losses. The companies, sectors and companies you invested in delivered vastly different results.
Growth was the place to be through the pandemic while value managers couldn't catch a break. It's the long run that matters but 2020 delivered pleasure or pain for many managers.
Australian major banks reported a decline in financial performance in 2020 but as the impact of the pandemic evolves, the banks maintained a strong focus on customers. Is the renewed market optimism justified?
The Your Future, Your Super reform gives a super fund 12 months to rectify its performance, but failing the first test implies a 90% chance of failing the second test a year later. A failed test is an existential event.
Much investing is misguided by spurious measurement fixations. What really counts in the long run is authenticity, resonance and imagination rather than sticking to index weights and short-termism.
Over the last 20 years, smaller Australian listed companies have outperformed larger companies but with greater volatility. Following a strong run in the last six months, the smaller end is looking expensive.
Despite the rhetoric from some investors, backing smaller, riskier stocks in the Australian share market will not necessarily give better returns than larger, less volatile stocks.
Going back to June 2019, investors would have questioned the logic of diversifying away from outperforming growth assets. But when markets feel at their best, it is paramount to keep a perspective on long-term goals.
Check your fund on the heatmap. Many super trustees must decide whether to stick with their strategies or accept that APRA will take a tough approach to weeding out underperformers with high fees.
Listed Australian Real Estate Investment Trusts (A-REITS) had an excellent FY19, but performance was dominated by a few sectors, and the question is whether they can deliver again in FY20.
Investors rarely ask fund managers the right questions, forcing a confusion between selling and investing. The relationship should focus on the long run and eliminate the luck and noise of short-termism.
Who knew? With some surprise results, the Government is on unexpected firm ground in asking people to draw on all their assets in retirement, although the comments show what feisty and informed readers we have.
It's a remarkable statistic. In any year since 1875, if you had invested in the Australian stock index, turned away and come back eight years later, your average return would be 120% with no negative periods.
Never stand between Australian households and an uncapped government programme with $3 billion in ‘free money’ to build or renovate their homes. But excess supply is coming with an absence of net migration.
Picking macro trends is difficult. What may seem logical and compelling one minute may completely change a few months later. There are better rewards from focussing on identifying the best companies at good prices.
The RBA Governor says rising house prices are due to "the design of our taxation and social security systems". The OECD says "the prolonged boom in house prices has inflated the wealth of many pensioners without impacting their pension eligibility." What's your view?
Some high-quality companies have emerged even stronger since the onset of COVID and are well placed for outperformance. We call these the ‘COVID Opportunists’ as they are now dominating their specific sectors.