Invest
Investors told: divest from Aussie banks
One fund manager has urged SMSF trustees to re-allocate their SMSF assets from major Australian banks into international companies, claiming Australian banks are showing a number of “red flags”.
Investors told: divest from Aussie banks
One fund manager has urged SMSF trustees to re-allocate their SMSF assets from major Australian banks into international companies, claiming Australian banks are showing a number of “red flags”.
Speaking at a lunch in Sydney yesterday, PM Capital chief investment officer Paul Moore said while SMSF trustees and even professional investors may be stuck with the habit of having a large allocation to bank stocks, major Australian banks are likely to be reaching the end of their rally.
Mr Moore said while the prospect of franked dividends may be attractive, investors need to ask themselves “if they’d rather receive a 3 per cent return from their franked dividend or earn a 10 per cent return, pay a bit of tax and end up with a 7 per cent return”.
“If people get a dollar back from the government they think it's Christmas even though it’s just one dollar – they’d rather get that one dollar back from the government than get five dollars back from somewhere else,” said Mr Moore.
Bank stocks, he said, have mostly just gone up and down over the past 18 months.
“They haven’t actually done much over the last 18 months, so it tells you that they’re struggling a bit because their earnings are maxed out and their valuations are pretty high,” he said.
“The bank index has never been as high as it has in 15 years, so that’s got to be a red flag to most professional investors.”
Mr Moore said investors should be looking at overseas banks which are generally 20 to 25 per cent cheaper than Australian banks and with an elevated currency.
Australian banks he believes will begin to struggle in terms of what investors can get in total return.
“I suspect we really are in the final innings for banks in terms of absolute performance relative to what you can get elsewhere,” he said.
However, SMSF trustees are probably reluctant to give up their bank stocks since they’ve done well with them previously.
“Until they’ve had a bad experience, they probably won’t sell,” Mr Moore said.
RELATED ARTICLES
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
