Millennial Super

The attached article breaks a number of stereotypes that we have regarding the millennial demographic.

 

  • They are our largest pool of investors making up 59% of the market.
  • They are more conservative than we thought with a priority to seeking guaranteed or reliable investment returns
  • They have more money due to higher incomes and inheritance
  • They are socially responsible with their investment strategy
  • They don’t actively seek advice as it is either too expensive or they don’t have enough
  • They make up over 50% of all mobile trades via CommSec

 

However as expected:

  • They embrace the technology component and are more likely to utilise mobile apps

Millennial investors smash avocado myth in ASX report

Contrary to the stereotype that millennials imprudently spend all their money on expensive smashed avocado breakfasts, the ASX has revealed the number of millennial investors in Australia has almost doubled over the last 5 years. Young investors (18-24yo) now make up 20% of Australian investors (up from 10% in 2012), with the proportion of Gen Y investors (25-34yo) increasing from 24% to 39% of individuals investing over the same period.

ASIC's Greg Medcraft warns hybrids are 'ridiculous' for retail investors

The chairman of ASIC Greg Medcraft said today in the AFR that billions of dollars of hybrid securities issued to retail investors by the major banks will eventually cause problems for the financial system. 

Mr Medcraft said hybrid securities were a “ridiculous” product for retail investors. He said it was notable that they had been banned for retail investors in other markets such as the United Kingdom.  "If a bank has any trouble they're the first line of defence." 

ASIC queried advisers and brokers in the June quarter about advice given on hybrids. 

More small investors using SMSFs to buy commercial property

Head of Policy for the SMSF Association Jordan George comments that investing in Commercial Property which offers diversification, stable and higher returns “is part of an overall trend that is seeing SMSF’s diversify their portfolios away from blue-chip, fully franked Australian shares and cash and term deposits, and one we would expect them continue pursuing

PE Capital presents at 188 Group

PE Capital was proud to be invited to be the guest speaker in at the recent investor event organised by 188 Group.

 

The 188 Group is an organisation whose goal is to help educate and connect holders of the government’s 188 Visa subclass with reputable business that can add value to their members.

 

Simon Day , CEO of PE Capital and Jason Huang, Director of PE Capital Asia, took the opportunity to inform the audience on the macro, micro and regulatory environment in Australia

 

Audience feedback from the over 100 investors in attendance was positive with many of the attendee’s taking the opportunity to make further enquiries.

Convenience store upgrade fuelling growth

In Tuesdays, Australian Financial Review there was an interesting article written by Sue Mitchell looking at the convenience/ petrol station model in Australia and its various players. Interestingly, the convenience sector is growing 3 times faster than the grocery sector which is why BP and Caltex are putting big bucks in to get a bigger share of the $20b market from Coles/ Express and 7Eleven.

Major banks hybrids downgraded

Interesting reasoning from S & P re. their downgrading of the bank hybrids. Essentially it is “that government support would be unlikely to be extended to major bank hybrids and subordinated debt instruments”.

 

We certainly recall Mr Rudd announcing the Government Guarantee of bank deposits at the start of the last GFC.

 

And we further recall which bank deposit products were EXCLUDED from the Government Guarantee. I have listed some below:

 

  1. Cash Management Trusts (Bye bye Macquarie CMT, hello Macquarie CMA)
  2. Debentures (Bye bye Esanda Debentures, hello Esanda TD (not for long))
  3. Bank Bills (Bye bye Bank Bills)

 

So we think S & P’s reasoning is fair. The government has history in this regard. They won’t guarantee everything issued by the banks, just the key products.

 

Worth considering when it comes to portfolio allocation, especially in cash, TD’s and fixed interest.

Looking at the alternative side of things

Interesting article that looks at how alternatives are becoming more mainstream as key myths are being disproven, especially in relation to people perceptions that they are too risky, complicated and expensive. In the current environment where traditional investments are not living up to investors’ expectations, participants are starting to look at alternative investments to find more attractive returns, diversify their portfolio, reduce risk and to better align with longer term strategies.