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Archive for investment planning Perth

Global Infrastructure Platform from AMP Capital Garners $1 Billion USD in New Commitments

If you are interested in investment planning help here in the Perth area, you may be interested in some recent developments from our parent company, AMP Capital. The AMP Capital global infrastructure platform recently added more than $1 billion USD, bringing it closer to its final close of $2 million USD.*

Investment Planning Firm Announces Global Infrastructure Platform

For its second and third closes, the Global Infrastructure Fund raised close to $400 million USD cumulatively. When the investor commitments are combined with an existing portfolio containing a diversified selection of European infrastructure equity assets, the platform has amassed more than 75% of its target.*

According to Boe Pahari, who is the Managing Partner of the AMP Capital Global Infrastructure Fund, “Investors….understand the many benefits that infrastructure provides to a portfolio.” These include: inflation and GDP linkage, high yield, low volatility, as well as low correlation with equities. Mr Pahari is encouraged because of the “increasing demand” for the platform.*

According to Anthony Fasso, CEO International of AMP Capital, the AMP Capital global infrastructure platform has drawn interest from investors in the US, Canada, Switzerland, Spain, Finland, Denmark, Japan and the Middle East.*

AMP Capital launched the global infrastructure platform in October 2014. Their open-ended Strategic Infrastructure Trust of Europe was converted into a closed-ended European fund. Subsequently, the Global Infrastructure Fund was launched.*

The platform is mandated to focus on “mature, brownfield assets” that hold long-term contracted revenues or monopolies in sectors which have proven to offer the best relative value. These include: energy, transport, utilities and communication.*

Currently, AMP Capital employs an experienced team of more than 60 professionals who specialise in infrastructure. They are located in New York, Sydney, New Delhi and London.*

Do You Require Investment Planning and Financial Services in Perth?

To learn more about us or about the AMP Capital Global Infrastructure Fund, call Approved Financial Planners in Perth today: 1300 787 274.

*AMP Capital, 24 February 2016. “AMP Capital’s global infrastructure platform surpasses US $1 billion in new commitments.”

Is Climate Change a Factor in Investments?

Investment planning in Perth and beyond has been introduced to a relatively new factor in potential investment performance: climate change. More specifically, greenhouse gas emissions are an important factor in evaluating Australian and global equity portfolios.*

Ian Woods is the Head of Environmental, Social and Governance Investment Research for our parent company, AMP Capital. Recently, Mr Woods published an insight paper on the AMP Capital blog called “Greenhouse gas emissions: risks and challenges for portfolios.” We would like to share some of his thoughts on the subject with you.*

Investment Planning Firm on Climate Change

Mr Woods used the Paris Climate Change Agreement as an example of a global commitment to acknowledge climate change. He feels that both companies and investors need to assess, communicate and manage risks posed to them by climate change.*

Assessing Greenhouse Gas Emissions

Greenhouse gas emissions are split into three categories. Scope 1 is from company operations, such as the burning of fossil fuel. Scope 2 is the emissions from the process of supplying electricity for operations generated by the combustion of fossil fuels. Scope 3 may include transportation of raw materials and provision of services.*

Entire funds are measured, company by company, for greenhouse gas exposure to assess the risk. Mr Woods thinks that either governments will enact a “carbon tax” or the market will exact a “carbon price” regarding greenhouse gas emissions. This and other factors will be used to assess the effects of greenhouse gas exposure on a fund’s performance.*

Assessing Climate Change Risk in Portfolios

Mr Woods describes the process used by AMP Capital to assess risk in various portfolios. It involves a lot of mathematics and metrics that we don’t have the time to describe for you here. Suffice to say that AMP Capital has been assessing the climate change exposure of the AMP Capital Sustainable Australian Equity Fund and the ASX 200 for more than six years.*

Call One of Our Investment Planning Advisers in Perth Today

To learn more, call us today: 1300 787 274.

*AMP Capital, 23 February 2016. Ian Woods: “Greenhouse gas emissions: risks and challenges for portfolios.”

Outlook for Investing in Australian Banks

We have been providing investment planning services to clients in the Perth area since 2005 and have more than 40 years’ combined experience in the financial industry. We are now affiliated with AMP Capital, who provide us with even more resources to help us help you.

Recently, on the AMP Capital blog, Investment Director Jeff Brunton, Head of Credit Research Sonia Baillie and Portfolio Manager and Analyst Tom Young, all of AMP Capital, discussed the outlook for investing in banks from their respective perspectives. We would like to provide you with a “short version” of the information.*

Investment Planning in Investing in Australian Banks

Equity Perspective

In the last 12 months, the major banks have been under some pressure. For some of the banks, share valuation levels are similar to those during the Global Financial Crisis (GFC). During the same period, dividend yields of major banks have seen a rise of 2%. Share prices could become more volatile in the near future, as lower commodity prices and a housing market slowdown could exert a “drag” on earnings growth.*

Credit Perspective

Since the beginning of February, major bank credit spreads have undergone a sharp widening. On some securities, spreads are approaching their widest levels over a period of three years. There are three “drivers” for this widening.

Led by the commodity and energy sectors, there has been a global widening of credit spreads. The credit quality of European banks has caused concern among investors. In addition, new regulatory requirements are forcing banks to build their capital buffers.*

Opportunity or Risk?

The AMP Capital officers agree that the level of opportunity for shares of any bank are dependent upon the macro environment. In the credit market sector, Australian banks are receiving more attractive valuations, due to the widening of credit spreads, as medium term investments. However, the AMP Capital officers warn that “risk aversion is likely to remain elevated in the near term.”

Get Investment Planning Help from our Perth Office

To learn more, call Approved Financial Planners today: 1300 787 274.

* AMP Capital. 11 February 2016. “Australian banks: equity and credit perspectives on market movement.”

Nine Tips for Long Term Investors

We would like to tell you about nine investment planning tips for investors in Perth and across Australia. The tips are courtesy of Dr Shane Oliver, who is the Head of Investment Strategy and Economics and Chief Economist for our parent company, AMP Capital.

Investment Planning Tips to Long Term Investors

On the AMP Capital company blog, Dr Oliver recently provided a massive document containing his investment outlook for 2016. He covered numerous topics, the most important of which we have covered here on this blog. The article was called, “2016 – a list of lists regarding the macro investment outlook.” Here are nine tips Dr Oliver feels that investors “should remember.”*

    1. “The power of compound returns.” Those who save in “growth assets” often see substantial returns in the long term. For example, if an investment returns 8% per annum, the asset’s value doubles in nine years.*
    2. Long term investors are well-served to allow for cyclical losses in the short term and stay the course.*
    3. It is important to diversify one’s portfolio to protect against falls. It could be wise to consider active asset allocation.*
    4. “Turn down the noise.” Investors have instant access to market information and overreaction can cause bad investment decisions.*
    5. Buy low and sell high. Starting point valuations are important. Those who sell after a major fall are just locking their losses in.*
    6. The sharemarket can be volatile, but a well-diversified portfolio consistently generates higher long-term returns than interest from bank deposits.*
    7. Don’t follow the crowd in extreme actions because they are “invariably wrong.”*
    8. It is wise to seek investments that provide “decent” and sustainable cash flows.*
    9. Accept the current reality: investing is a “low return world.” In a world where inflation is only 2.5%, an investment that returns 8% is a good long-term investment.*

Call the Investment Planning Advisers at Approved Financial Planners

Remember that these are general tips as provided on the AMP Capital company blog. If you want individual financial advice, you need to call our office and talk to a financial planner. Call 08 6462 0888 today.

*AMP Capital, Dr Shane Oliver. “2016 – a list of lists regarding the macro investment outlook.” 21 January 2016.

What Happened with the January Sharemarket Drop?

2016 greeted investment planning professionals in Perth and across Australia with bad news as the global sharemarket dropped sharply on the first trading day. Chinese shares were down around 7%, European shares lost around 3% and US shares dropped 2.7% before rallying to a loss of 1.5% by the end of the trading day.*

So, what happened? Shane Oliver, Head of the Investment Strategy Team and Chief Economist for AMP Capital, addressed it in a piece on the AMP Capital blog called “Rough start – What’s happened in markets?”*

Financial Planning January Sharemarket Drop

According to Mr Oliver, market volatility is being driven by insecurity about Chinese growth potential, increased tensions between Iran and Saudi Arabia and manufacturing data from the US resulting in their drop in the Institute for Supply Management (ISM) Manufacturing Conditions Index for December.*

Mr Oliver’s Food for Thought

Mr Oliver reminded investors to consider and “keep in mind.” Here is the condensed version.*

Iran and Saudi Arabia have been at odds with each other for a while now. As the US continues to withdraw from the Middle East, these tensions continue to escalate. However, Mr Oliver thinks it is “unlikely” that there will be any direct conflict between the two countries such as a war, which would raise oil prices.*

The Chinese markets may fall further but the numbers may have been exaggerated. He believes that an impending law forbidding insider trading may have caused a massive “sell off” to get in before the deadline. The Caixin manufacturing Purchasing Managers’ Index (PMI) was low but other indicators seem to indicate stable growth.*

Most data points in the US point towards a stable growth rate of around 2%, despite their less-than-stellar ISM index. *

Fragile economic growth on a global level should keep cash interest rates stable with only slight rises. Mr Oliver predicts two US Federal Reserve Interest Rate rises of 0.25% each over the year.*

Call Our Investment Planning Advisers in Perth Today

If you would like more information, professional financial planning help or a free consult, call us today: 08 6462 0888.

*AMP Capital, Shane Oliver. “Rough start – What’s happened in Markets?” 05 January 2016.

Investment Planning: What a “Back to Basics” Investment Strategy Could Mean for You

Debbie Alliston is the Head of Multi-Asset Portfolio Management for our parent company, AMP Capital. Her leadership is one of the many investment planning resources provided to us by AMP Capital.

In December 2015, Ms Alliston contributed an article to the AMP Capital blog called “Is it time to go back to basics?” We would like to provide you with some of the information from that article.*

Cash interest rates are low, not only in Australia but around the world. US rates are rising but the projected growth is slow. Consequently, investors may wonder how to make money in the financial markets. Bond yields are low, as are the yields in other asset classes.*

When the numbers for 2015 come in, it is expected that the equity markets will show positive performance for four consecutive years. However, the low-growth environment in financial markets has many investors unsure of future growth in the equity markets. Australian equities have produced negative earnings growth for the last three years. Ms Alliston doesn’t see it turning around until at least 2017.*

Ms Alliston is of the opinion that a “back to basics” approach may be appropriate.*

Back To Baiscs Investment Planning Strategy

Equity Risk Premium (ERP)

According to Ms Alliston, investing in equities provides a premium over investing in bonds and cash. Since 1900, what she calls the “realised ERP” has provided an average of close to 6.0% for Australia and 4.5% for the US. For the present, she predicts a 3.5-4.0% ERP in Australia and between 4.5-5.0% ERP in Asia and emerging markets.*

She sees the US market as “fully valued” while Japan, Europe and Asia “offer attractive value.” While the yields from cash rates and bonds are projected to remain low, she sees the equities market as one that will reward investors for their risk, making equities “an asset of choice.”*

However, she cautions that the valuation buffer has gone down while risk in the equities market has risen. Before the Global Financial Crisis (GFC), Australian equity shares had outperformed global shares. For the last five years, though, global markets have outperformed Australian markets.*

She believes Australian shares will continue to lag behind global markets due to subpar growth, pressure on banks to improve the strength of their balance sheets and the commodities sector still seeing slow growth.*

Diversification

Diversification is a technique designed to mitigate equity risk. In most portfolios, equities represent the largest risk. Diversification means finding strategies and assets that are not associated with equity risk.*

Ms Alliston sees investing in Government bonds as “the most obvious diversifier.” When the economy fails to grow, cash rates are typically lowered. This increases capital value and lowers bond yields. Bonds become more sensitive to changes in their yields as the duration or maturity of those bonds becomes longer.*

While current yields are low, Ms Alliston feels that if there is a significant market correction, bonds will outperform equities, which can provide offset and mitigate a portion of one’s losses. Currency can also play a role because the Australian dollar can often underperform when equity markets are falling.*

Infrastructure and property have a connection to economic growth factors but they are also tied into factors such as supply and demand, cash rates and inflation. This can give them different performance dynamics than equities.*

Private equity provides diversity because while economic factors affect them, management can make a great difference in performance.*

What it All Means

Ms Alliston believes that investors should examine their portfolios closely to evaluate their level of diversification. She cites portfolio construction as a skill that is specialised and can help maximise returns for investors. In the quarter ending September 2015, diversified funds only suffered between 25-33% of the drawdown in equities markets.*

There are numerous multi-asset vehicles on the market for investors which are professionally managed to provide varying degrees of risk/reward. Ms Alliston sees a “professionally managed solution” as an investment that “makes sense.”

If you would like to learn more or would like an obligation-free consult, call Approved Financial Planners today: 08 6462 0888.

*AMP Capital, Debbie Alliston. “Is it time to go back to basics?” 09 December 2015.

Investment Planning: Equity Markets Perform Stronger in Fourth Quarter

Now that we are affiliated with AMP Capital, we have access to their resources to help us provide investment planning services from our Perth area office. One of those resources is Shane Oliver, who is AMP Capital’s Chief Economist and Head of Investment Strategy. In a recent blog post and video, Mr Oliver addressed the performance of the equities market in the fourth quarter. We would like to share some of his points with you here.

Perth Investment Planning - Equity Market

Consumers Benefit from Low Oil Prices

According to Mr Oliver, oil prices have decreased approximately 50% since the middle of 2014. For countries who import more oil than they export, Mr Oliver sees this as good news because the prices for petrol are lower. *

Inflation Figures Low for September

Mr Oliver feels that low inflation figures in the September report, combined with the recent tightening of financial standards for property investors and owner-occupiers by the “big four” banks, may result in yet another lowering of the RBA cash interest rate for 2016. *

Gains in Equity Market

According to Mr Oliver, October can be a “turning point” in which equity markets turn from “weakness” to strength. Mr Oliver was satisfied with the performance for October and predicts what he calls a “further rally in markets” to continue into 2016 as part of the ongoing “cyclical bull market in shares.” He mentioned that a “short term pause” during November was possible, but that “year end seasonal strength” would prevail.

Call an Investment Planning Adviser at Approved Financial Planners

Remember that we can’t give any individual advice without an individual consult due to ASIC regulations. However, we would like to remind you that we offer a full service solution to all of your investment planning needs in our Perth area office. We will be happy to provide you with an obligation-free, personal consult. Call Approved Financial Planners today: 08 6462 0888.

*Shane Oliver, AMP Capital. Equity markets rally in the final quarter. 06 November 2015.

Three Straight Years of Good Returns for Diversified Investors: How Long Will it Last?

The investment planning industry has had three great years. In Perth and across Australia, the past financial year produced a third consecutive year of “solid returns for investors,” according to AMP Capital Chief Economist, Dr Shane Oliver. Dr Oliver projects returns to “slow” in the coming year, but still provide “reasonable” returns. *

He attributes this to steady share evaluations and an economy growing fast enough to be healthy but slow enough to stem inflation. Here’s why.*

Three Straight Years of Good Returns for Diversified Investors

The Overall Outlook

Diversified investors who “moved beyond cash” saw solid returns. The average of superannuation fund performance was 9.9%, marking three consecutive financial years of growth at 9.9% or over. *

International equities ($A) provided a 25% return on investment (ROI). Australian listed property provided 20% ROI; global listed property returned 10%; international equities (Local) returned 9% and direct property returned 8%. Australian equities, Australian bonds and global bonds all returned 6%. Cash investments had the lowest ROI at 2.6%.*

There were a host of international concerns, such as the economies of China and Greece apparently threatening to collapse, geopolitical problems in the Ukraine, the ISIS terror threat and possible degradation of the US dollar. This was combined with concerns about how the Australian economy will fare now that the mining “boom” is “officially” over.*

However, there were also plenty of factors that were positive for us in the last financial year. The US has kept their cash interest target rate at a record low 0-0.25%, while “monetary easing” was reported in Japan, China and Europe. Our own rate cuts and a lowering of the A$ has helped the non-mining segment of our economy pick up.*

When you put it all together, it spells another projected year of good returns for well-managed investment portfolios.*

The Right Advice Can Make All the Difference

At Approved Financial Planners, we have more than 40 years’ combined experience in the field of investment planning. To learn more, call our Perth area office today: 08 6462 0888.

*AMP Capital: “The investment outlook–can the good returns continue?” Dr Shane Oliver.
https://www.ampcapital.com.au/article-detail?alias=/olivers-insights/july-2015/the-investment-outlook-%E2%80%93-can-the-good-returns-cont

Can You Spot an Investment Before it Becomes a Trend?

If you happened upon this page, you are probably interested in investment planning and live somewhere in the Perth area. At Approved Financial Planners, we provide a full range of services such as financial planning and mortgage broking to our Perth area neighbours.

We are often asked what the “new trends” are regarding investing. While many investors like to jump on the newest trends, those who prosper the best are usually those who can spot investments before they become trends. If an investment is a trend, it often means that too many people have already “jumped in.”

Spot an Investment

Our parent company, AMP Capital, has identified what they believe will be an investment trend and a new asset class soon: global listed infrastructure.*

The Global Listed Infrastructure Team of AMP Capital is led by Tim Humphreys. Mr Humphreys holds a Bachelor of Engineering Degree with Honours from the University of Sheffield. He applies his knowledge of engineering to the financial field and is known as a skilled infrastructure analyst.*

Mr Humphreys is of the belief that one of the more effective ways to maximise investment income is to find what he refers to as a “hidden gem”: a solid investment that has not become a trend yet. Global listed infrastructure is a relatively new investment category, slightly less than ten years old. Mr Humphreys feels that global listed infrastructure is positioned similarly to where Real Estate Investment Trusts (REIT’s) were in the 1980’s.*

Many investors who “got in early” on REIT’s prospered greatly. Mr Humphreys feels that global listed infrastructure is a sound investment with the potential for growth similar to REIT’s.*

Call Approved Financial Planners

Global listed infrastructure might not be the best investment for everyone in the Perth market. We can’t really recommend it until you have an individual consult with one of our financial planners. To make an appointment or to learn more, call us today: 08 6462 0888.

*AMP Capital Insight Paper: May 2015. “Spotting an Investment Trend Before it Happens.”

Tips for Creating Passive Income Streams

Investment planning can be confusing and scary. It is one of the services we offer in our Perth office. When investment planning is done right, your money can make money for you. We cannot offer specific information over a blog; you will have to contact our office in Perth for a consult if you would like specific advice. However, we can provide some general tips to get you pointed in the right direction.

Creating Passive Income Streams

Do You Have Goals Yet?

Our parent company, AMP Financial, has a lot of good information on their website, https://www.amp.com.au/. On their page entitled “Understanding Investments,” they recommend that you formulate short term, medium term and long term goals. Short term is defined as in the next six months to two years. Medium term is the next two to five years. Long term is anything further down the road than five years.

Choosing the Correct Investment Vehicle

On AMP’s webpage called “Choosing the right investment option,” they explain how to decide which forms of investments are right for you. The first factor to take into consideration is your risk tolerance. This is determined by combining your attitude towards risk with the amount of time you have to invest.

Generally, the higher the potential return, the higher the risk. However, that isn’t always the case and our financial planners are experts at finding investments that have above-average risk to reward ratios. Here are some risk-reward factors of popular investments.

If you “invest” in a savings account or term deposit, the risk is extremely low, but the returns are also low. Fixed income investments such as bonds or debentures are low risk, but can provide average returns if they are linked to the rate of inflation.

Equities or shares are seen as very high risk and volatile. They can, however, provide high rates of return.

Call Approved Financial Planners Today

To learn more, call our office in Perth: 08 6462 0888.