Invest
What do over 65s want from their investments?
The proportion of Aussies 65 and over is forecast to double within 30 years, prompting fund manager Pengana’s question: what do they need from their investments?
What do over 65s want from their investments?
The proportion of Aussies 65 and over is forecast to double within 30 years, prompting fund manager Pengana’s question: what do they need from their investments?
Investment analyst with Pengana’s Australian Equities Fund, Mark Christensen said at a Sydney symposium this week that the fund manager is “very aware of ...[the] very powerful demographic trend” of Australia’s ageing population.
He noted that this demographic trend would have “quite a profound impact” on investors and managers as this ageing cohort prompts an “increased demand for a yielding product, or an income product”.
Before considering the yield needs of this demographic, Mr Christensen issued a warning about the inherent risks that lie within high-yielding assets.
Quoting investment writer Raymond DeVoe Jr, Mr Christensen said: “More money has been lost reaching for yield than at the point of a gun.”
Continuing, Mr Christensen said: “The point that he [DeVoe] really makes, and something that I think we all need to take away, is that if reaching for yield or achieving a yield target is your primary or main focus then it's very easy to lose sight of the initial risk which you take on at every 10 or every 20 basis points that you reach.
“Human nature really does make you reach that little bit higher, particularly if you are set on defined targets. It's a big warning sign before you approach the space.”
With this in mind, Mr Christensen identified capital preservation and a yield that sits above the cash rate as the two primary needs of equity income investors.
“Yield investing can be tricky but that's the point; you have to give a lot of thought to sustainability and the risk that you're taking on for every 10, 20, 30, 50 basis points that you reach for,” Mr Christensen said.
As such, the equities fund has a goal of 6-8 per cent yield with strong medium-term growth coupled with a capital preservation mandate.
Mr Christensen said Pengana has a “capital preservation toolkit” made up of: ability to stay in cash, a disciplined investment process, options, currency hedging, a margin of safety and stocks that are economically insensitive.
Further, for older investors, Pengana considers cash holdings “an outcome of available investment opportunities”, explaining: “Cash is a low risk, income producing option to take advantage of future opportunities.”
RELATED ARTICLES
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
