Investing Money

Tuesday, April 7, 2020

[Smart Investing] Look beyond the day to day

Investments and personal finance insights from Vanguard Australia

08 April 2020

Hi everyone,

In this week's Smart Investing, we discuss why (even as some sense of normality begins to return) it might not be best to look at your portfolio balances right now. Rather, focus on the longer term.

As you will have also heard, the government has granted eligible Australians financially impacted by the coronavirus early access to their super and more than 360,000 superannuation fund members have already registered for this. For many, this is perhaps unavoidable and ultimately necessary in these difficult times. But whatever your individual circumstances might be, Vanguard's Senior Financial Writer Tony Kaye explores why it is important to carefully consider the long-term financial impacts of early withdrawal before you act.

Lastly, as the Australian dollar continues its downward trajectory, many might be wondering if hedging is an appropriate investment strategy. Our final article discusses why and when you should consider doing so.

Hope you all have a great Easter break, even if it might feel a little different this year.

As always, feel free to email us with your questions or feedback.

Regards,

Robin Bowerman
Head of Corporate Affairs
Vanguard Australia

Look beyond the day to day

By Robin Bowerman

Focusing on the long-term can be difficult when the here and now is demanding your full attention.

The cost of early super access

By Tony Kaye

Withdrawing savings from one's superannuation may seem like a logical move, but there are other support options available that have no long-term financial consequences. These should be explored as a priority.

$A lows a reminder to review hedging

By Robin Bowerman

The impact of COVID-19 continues to be a global challenge. Investors with a portion of a portfolio in international bonds or shares should think about when a hedged or unhedged strategy best suits their particular investment needs.

Vanguard in the news

Vanguard launches simplified investment platform

Financial Standard | Harrison Worley | 1 April 2020

Vanguard launched a new investment platform designed to simplify the investing experience and provide low-cost access to the firm's most popular products. The global funds management giant's new Vanguard Personal Investor offering will allow Australians to invest in the firm's Australian-listed ETFs brokerage free, in a move Vanguard said is aligned to its "ongoing commitment" to lower the cost of investing.

To read more, please visit the Financial Standard website.

Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.

In case you missed it

The investment portfolio X factor

By Tony Kaye

Factor-based funds use a rules-based actively managed approach to invest in companies that exhibit the specific characteristics aligned to their underlying strategy.

Good investment habits versus damaging biases

By Robin Bowerman

In a low-interest, lower-return, more-volatile investment environment, investors have an even greater incentive to keep wealth-damaging behavioural traits or biases under control.

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Tuesday, March 31, 2020

[Smart Investing] Ride the market to recovery

Investments and personal finance insights from Vanguard Australia

01 April 2020

Hi everyone,

I hope you are staying safe and doing well as we all continue to adjust to social distancing and this new, different way of living.

In this week's edition of Smart Investing, we again discuss the benefits of staying the course and remaining patient even when markets experience significant downturns like the one we are currently in. Understandably, you might be feeling a little worried about the state of things, whether it be over the economy or your own investments. But perhaps comfort can be taken from the fact that with every downturn, there will come an upswing – and this recovery is predicted to be quite rapid.

Vanguard's Senior Financial Writer Tony Kaye also explores the "dividend yield trap" and cautions investors to be wary of dividend expectations in the medium term as companies come to terms with the economic fallout from COVID-19.

Lastly, you might have seen a few news articles discussing the liquidity of bond markets over the past week or two. As such, we have also included a video featuring Vanguard CEO Tim Buckley and Global Head of Rates Sara Devereux to provide you a deeper dive into how bond markets are responding to the current stress and stimulus.

As always, feel free to email us with your questions or feedback.

Regards,

Robin Bowerman
Head of Corporate Affairs
Vanguard Australia

Ride the market to recovery

By Robin Bowerman

Severe market downturns feel anything but fair. Uncertainty and the sense of loss of control are powerful emotions to grapple with. But what we know from past market events is that patience will be rewarded and recoveries can be just as sudden and strong.

Don't fall for dividend yield traps

By Tony Kaye

What may look like a good yield opportunity at the moment may not pan out that way over the medium term, particularly as the economic and financial fallout from COVID-19 on the 2020-21 earnings results of listed companies becomes much clearer.

How bond markets are responding to stress and stimulus

Get insights from Vanguard's CEO and Global Head of Rates about the current state of the bond markets.

Watch video

Vanguard in the news

Bond fund spreads widen

Financial Standard | Kanika Sood | 23 March 2020

Investors looking to redeem their fixed interest allocations face deep buy/sell spreads, as poor liquidity forces funds to push them up significantly during COVID-19 volatility. "We expect that spreads will continue to increase and decrease more often in the near future - for instance, just this morning we issued another unitholder notice detailing the decrease in spreads across a number of our funds," a Vanguard spokesperson said. "The change in spreads reflects the volatility in markets which makes it harder to price and increases some costs, such as hedging. The increased spread also ensures there is a fair sharing of costs between those trading and existing investors."

To read more, please visit the Financial Standard website.

Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.