The recent poor performance of Australian equities has reinforced the importance of geographic portfolio diversification, says Australian Unity Investments.
According to Australian Unity Investments, investors need to diversify across sectors and geography as international shares are expected to outperform the Australian market.
Australian Unity Investments head David Bryant urged investors not to let recent economic concerns put them off investing outside Australia.
“With the Australian dollar also in long-term decline, there is now less risk in international shares than there is in the local market,” he said.
“Investing only in Australian equities will no longer give investors the returns they need.
“Those investors with a truly diversified portfolio, both within asset classes and by geographic region, will be the ones who will benefit from positive market movements around the globe."
However, Mr Bryant acknowledged that certain sectors within the Australian economy are still promising.
“While high-cost Australian resource producers will continue to feel the pressure, companies in other sectors could do well,” he said.
“There is positive news for other sectors, such as the still solid monthly building approvals – even though they are slowing a little they are up 14 per cent on the last year.
“There is growth in private credit (up six per cent); improvement in building loans (up five per cent); and an anticipated improvement in retail figures leading up to the Christmas season that could help individual companies do well,” said Mr Bryant.
Challenger recorded a slight incline in total assets under management to $84 billion in the first quarter of financial year 2020, up 3 per c...
Aussie investors might be missing billion-dollar EMD opportunities on their doorstep, but are the risks greater than the rewards? ...
When defensive equity positions become more appealing, stocks that exhibit lower risk attributes, including low beta stocks and stocks in tr...