Category: Strategic portfolio advice

If you’ve worked in the WA public sector at any point over the past few decades, you may have a West State Super account without even realising it. We regularly meet people who say, “I think I have one… but I’m not exactly sure how it works.”

West State Super is a unique, untaxed, and constitutionally protected scheme with rules and opportunities distinct from standard super funds. Understanding these differences is essential for effective retirement, tax, and estate planning.

What Is West State Super?

West State Super is an untaxed scheme administered by GESB and was available to WA public sector employees until it closed to new members in April 2007.

If you joined before 2007  – even if you’ve since changed positions or left the public sector  – you may still hold a West State account today.

What makes West State unique is its structure:

• No 15% tax on employer or salary-sacrificed contributions
• No tax on investment earnings within the fund
• Tax is applied when withdrawing or rolling over your benefit

That makes West State powerful when used strategically, but potentially costly if misunderstood.

Key Features You Should Know

You can salary sacrifice up to 100% of your public sector salary

This is one of the most misunderstood advantages of West State. While taxed funds restrict concessional contributions to annual caps, West State allows contributions up to 100% of your public sector salary (subject to employer policy). For many clients, who have the available cash flow, this is an opportunity to rapidly boost super tax-efficiently — especially in the final working years.

 The scheme uses a lifetime “untaxed plan cap”

Instead of the normal annual concessional caps, West State is governed by a lifetime cap on untaxed benefits. For the 2025-2026 financial year, the untaxed plan cap is $1,865,000.

Understanding where you sit against this cap is crucial, particularly for higher-earning or long-tenured public sector employees.

There are strategies that can utilise the lifetime cap on untaxed benefit to avoid paying an extra 30% on withdrawals.

West State offers unique estate planning outcomes

As West State is constitutionally protected, beneficiary tax outcomes differ significantly from standard funds. Dependants under the Superannuation Industry (Supervision) Act can receive the entire benefit tax free.

 Rollouts and withdrawals have different tax consequences

Rolling out of West State or transitioning into retirement requires careful consideration. A poorly timed roll-over or withdrawal can result in avoidable tax, whereas a well-planned strategy can significantly improve outcomes.

Common Pitfalls (and How to Avoid Them)

West State is powerful , but only when used properly.  This is the section where we see the biggest impact on clients’ retirement outcomes.

Here are the pitfalls we see most often:

Assuming West State works like a normal super fund

Many members believe West State behaves the same way as industry or retail funds. But because it’s untaxed and constitutionally protected, standard super strategies don’t always apply.

What this causes:

• Incorrect contribution strategies
• Confusion about caps
• Misunderstanding of tax outcomes at retirement

Rolling out at the wrong time

One of the most financially damaging mistakes we see is rolling out of West State without advice.

Poor timing can trigger unnecessary tax, especially when:

• moving to another super fund
• transitioning to retirement
• accessing benefits because of a job change

Often, staying in West State for a little longer — or rolling out in a structured way — results in a far better outcome.

No link between West State, estate planning and tax planning

Super is often considered in isolation. But West State’s unusual tax rules mean estate outcomes can vary dramatically depending on:

• who the beneficiaries are
• how benefits are withdrawn
• whether rollovers occur before or after death
• how the estate structure is set up

A coordinated plan between your adviser, accountant and solicitor can transform the final outcome.

Why Seeking Advice Matters

West State Super can be an exceptionally valuable part of a retirement plan — but only when its unique rules are clearly understood and strategically applied.

We work closely with WA public sector employees, as well as with accountants, lawyers and mortgage brokers who support them, to:

✔ Explain exactly how West State works

✔ Review contribution opportunities

✔ Plan for retirement tax efficiency

✔ Coordinate estate planning considerations

✔ Time roll-outs and transitions correctly

West State is not a simple fund, but with the right guidance it can be one of the most effective tools available to WA public servants.

If you or someone you assist holds a West State account, we’re here to help ensure it’s managed properly, and strategically for the best long-term outcome.

* This article contains purely factual information and/or general advice and does not constitute personal financial product advice.  The content of this article does not take into account your personal objectives, financial situation or needs and you must determine whether it is appropriate to your situation.  We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

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About the Author:

Robert Tawil – Private Client Adviser – Vantage Wealth Management

Robert holds a Bachelor of Economics (Economics, Quantitative Economics, Money and Banking, and Finance) from the University of Western Australia and a Diploma of Financial Planning. This allowed him to qualify as a Certified Financial Planner®. He commenced working in the financial services industry in 2015 and is a member of the Financial Advice Association Australia.

Robert values building strong relationships that are founded on trust and is passionate about helping people take control of their financial affairs and achieve their goals.

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1 October 2025

Given recent regulatory developments within the Australian private credit sector, we felt it important to share our views to provide clarity and reassurance. The sector has been the subject of heightened public commentary following the release of ASIC’s latest review, and as private credit plays an increasingly important role in client portfolios, we believe our perspective will help place these developments into context.

ASIC Report and Key Findings

The Australian private credit sector is presently subject to an in-depth regulatory review conducted by ASIC, which has shared its findings with the public via the publication of a detailed report (REP 814) entitled Private Credit in Australia (9 September 2025). The report recognises the vital and growing role private credit plays in complementing bank lending and providing funding diversity across the financial system, while also highlighting areas where governance, disclosure, and operational practices can be improved. We view these recommendations as part of a broader effort to set higher industry standards, which should support a stronger, more resilient private credit market as the sector continues to expand.

Sector Concentration Risks

A key theme from ASIC’s review relates to the concentration of lending within the real estate construction and development segment, accounting for approximately half of the estimated $200 billion market. While this area provides opportunities, it also introduces elevated risks given high construction costs, subdued commercial property values, and the presence of less experienced capital providers.

Transparency and Governance

ASIC identified shortcomings in disclosure standards, valuation methodologies and reporting practices across some funds, while also noting that asset managers serving institutional investors, including superannuation funds and family offices, often demonstrate more robust governance frameworks. Importantly, we see these regulatory observations as constructive as by raising the bar on transparency and disclosure, the regulator is supporting a healthier, more sustainable market environment for both investors and borrowers.

Heightened Regulatory Action

In tandem with the report’s release, ASIC’s enforcement activities have intensified. Temporary stop orders were placed on several private credit funds, reflecting increased regulatory surveillance and real action. Additionally, Lonsec recently downgraded several private credit funds amid governance and transparency issues. These developments reinforce the need for rigorous due diligence, stronger governance frameworks, and enhanced transparency from private credit fund managers.

Vantage’s Approach to Private Credit

At Vantage, our private credit allocations focus on funds with robust diversification beyond real estate, important to mitigate concentration risks. On the rare occasions where compelling, single asset real estate-backed opportunities arise, we reserve these exclusively for experienced clients with relevant property market expertise. Each investment is reviewed on a deal-by-deal basis to ensure close alignment with the individual investor’s objectives and risk profiles

The ASIC insights underscore the value of our disciplined and selective approach to private credit investment. We conduct comprehensive due diligence on all manager partnerships, requiring full transparency over holdings, valuation processes, and fee structures. The Vantage Investment Team also engages frequently with the portfolio managers (typically on a quarterly basis) to monitor underlying exposures and adherence to stated processes. This rigorous approach ensures that where private credit is included, it is done so selectively and with appropriate safeguards.

Role in Client Portfolios

Vantage continues to believe private credit can serve as an important diversifying component in client portfolios. Just as equities span a spectrum from defensive businesses with steady earnings and dividends to more speculative companies with volatile share prices, private credit too covers a wide risk–return range.

Alongside diversification benefits, private credit offers attractive income yields in a modest interest rate environment, low correlation to listed markets, and access to opportunities not typically available in public markets. When carefully selected and managed, private credit can provide both resilience and incremental return potential within long-term portfolios.

Conclusion

We regard ASIC’s inquiry on the Australian private credit industry as a constructive development that will ultimately enhance the quality and durability of the sector. An awareness within the sector of stronger governance, improved transparency, and more consistent disclosure standard monitoring will benefit investors and improve confidence in the asset class. Combined with our selective approach, we believe this creates an opportunity for clients to access well-diversified private credit strategies that contribute meaningfully to portfolio diversification and income generation, with risks well managed and understood.

* This article contains purely factual information and/or general advice and does not constitute personal financial product advice.  The content of this article does not take into account your personal objectives, financial situation or needs and you must determine whether it is appropriate to your situation.  We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

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About the Author:

Anthony Nguyen – Head of Investments – Vantage Wealth Management

Anthony commenced his career in the financial services industry in 2018, bringing a strong educational background to his role. He holds a Bachelor of Commerce from the University of Western Australia and a Master of Finance from Curtin University, where he received the Curtin School of Economics and Finance Head of School Prize for graduating at the top of his class. He has also successfully passed the CFA Level 2 exam.

As the Head of Investment at Vantage Wealth Management, Anthony is responsible for overseeing investment due diligence, investment governance and portfolio management of the Vantage Managed Accounts. He is an integral member of both the Vantage Investment Team and the Vantage Investment Committee.

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Even the most experienced investors need to put aside some time out of their busy lives for a quick annual check-up.

In five minutes, you can spot small issues before they become big ones:

1. Has your attitude to taking risk changed? Life events or business changes can shift your comfort with risk.

2. Are you as diversified as you should be? Act to take profits if one asset class or sector has grown too large (particularly now with recent strong property and share market performance).

3. Does your superannuation complement your other investments? Take a whole of portfolio perspective.

4. Is your cash balance ok? Enough for opportunities and expenses, but not so much that you don’t capture the returns you need.

A quick review like this each year helps keep your money aligned with your goals and saves time and stress later.

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Most investors understand share prices go up and down, but prolonged downturns can be the ultimate test of resilience. As difficult as it might be to keep your cool, sometimes the most sensible course of action is to simply stay the course.

The good news is there is a simple strategy that can help you filter out the noise and stay consistent with your investing: dollar cost averaging.

Essentially, dollar cost averaging involves investing fixed amounts at regular intervals, regardless of how the market is performing.

Taking this approach allows you to buy more shares when prices are low and fewer shares when prices are high. The idea is that you end up with a lower average cost per share than if you were to purchase in bulk.

Of course, it’s by no means a guaranteed way to make money, and if the market dips your portfolio might suffer just like everyone else’s. But for those with discipline and a long-term outlook, dollar cost averaging can take a lot of the stress and pressure out of growing your investments.

What are the pros and cons?

So why is dollar cost averaging so appealing, particularly to newer investors? Here are just some advantages:

• You can avoid the pitfalls that come with trying to time the market
• Taking a methodical approach means you’re less likely to make emotional decisions
• You don’t need a lump sum to invest — little and often works well here.

As for the downsides, remember that:

• The strategy alone won’t pay off if you pick losing investments
• More frequent transactions could mean you pay more in brokerage fees
• In a rising market, you might be better off making a lump sum investment

How do you get started?

First you’ll need to look at your budget and work out how much money you’re comfortable investing. This will come down to your risk tolerance, how much you earn each month, and how much of your savings you want to preserve as a financial buffer.

There’s no number or percentage that will be the ‘correct’ amount, but keep in mind that the smaller the trade, the higher the brokerage fee will be as a percentage of your investment.

Once you have a figure in mind, you’ll need to decide where you’ll be investing it. The DCA approach tends to favour investments like Exchange-Traded Funds, or ETFs, because of their built-in diversification, but it’s really important to do thorough research into what suits you best.

Finally, you’ll have to choose a trading platform or broker to conduct your buying and selling. Look for one with low fees, a user-friendly interface, and access to the markets you’re interested in.

Once you’re ready, it’s time to place your first trade. From here, the name of the game is consistency. If you can commit to investing a fixed amount regularly (for example, each month), it can help smooth the ups and downs of the market and reduce the average cost per unit over the long run.

For a more comprehensive review of your personal circumstances, we recommend seeking financial advice tailored to your needs.

Source

This article was sourced from the Vantage Wealth Financial Knowledge Centre with statistics accurate as May, 2025.  The Knowledge Centre provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances. Vantage Wealth Management Pty Ltd has representatives who are authorised to provide personal financial advice.  

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When interest rates drop, it often sparks excitement, as people start thinking about lower repayments, cheaper loans, and extra cash flow. While it’s tempting to pocket the savings and treat yourself, a drop in interest rates presents an incredible opportunity to make smarter financial decisions that can set you up for the future.

Interest rates are a key lever in the economy, and changes impact everything from your mortgage to your savings. If you play your cards right during a period of low rates, you can turn this into a financial win that pays off in the long term. Here’s how to be smart and get ahead.

Don’t change your repayments 

If you’re paying off a mortgage, keeping your repayments at the same level when rates drop is one of the smartest moves you can make. Why? Because every extra dollar you pay above your minimum repayment goes directly toward reducing the principal amount. This reduces the overall interest you’ll pay in the long term and helps you pay off your loan faster.

For example, if your home loan interest rate drops from 6% to 5%, calculate your new minimum repayment but continue paying the old amount. That difference, which you were already used to paying, will work harder for you by chipping away at your debt.

Build an emergency fund

Lower interest rates often mean lower returns on savings accounts, but this doesn’t mean saving becomes any less important. Use the extra cash flow from lower loan repayments or other expenses to bolster your emergency fund.

Aim to have three to six months’ worth of living expenses set aside in case of unexpected events like job loss or health issues. If you don’t already have an emergency fund, now is the perfect time to start. A high-interest online savings account or offset account linked to your mortgage are good options to consider.

Reassess your debts

A drop in interest rates is the perfect time to review all your debts and see where you can save even more money. Look at credit cards, personal loans, or car loans. If the rates on these debts haven’t decreased in line with broader rate cuts, it may be worth shopping around for a better deal.

Debt consolidation can also be a smart move. By rolling high-interest debts into a single, lower-interest loan, you can save on interest payments and streamline your finances.

Invest strategically

Low interest rates can be a double-edged sword for savers. On one hand, borrowing becomes cheaper, but on the other, returns on cash and term deposits may decline. This is a good time to think strategically about investing.

If you’re new to investing, start with small amounts and diversify your portfolio. Low-cost exchange-traded funds (ETFs) or superannuation contributions can offer good growth potential over time. Remember, investing comes with risks, so make sure you’re comfortable with your risk tolerance and do your research or seek financial advice.

Consider refinancing

With lower rates, refinancing your mortgage or loans can lead to significant savings. Lenders often compete aggressively for new customers when rates drop, so you may find an attractive offer with lower fees or a better interest rate. Before refinancing, check for any exit fees on your current loan and calculate whether the savings from switching outweigh the costs. Use tools available online to compare rates and ensure you’re getting the best deal.

Supercharge your super

Lower rates can also mean reduced returns for retirees and those close to retirement. If you’re still working, consider making extra contributions to your superannuation. Even small amounts can make a big difference due to the power of compounding interest.

Prepare for the future

Interest rates don’t stay low forever, so now is the time to think ahead. If you’re enjoying lower repayments, use this time to create a buffer for when rates inevitably rise again. Whether it’s saving extra in an offset account or paying down your debts faster, small actions now can protect you in the future.

Educate yourself

Take this opportunity to build your financial knowledge. Whether it’s understanding how interest rates impact your investments, learning about property markets, or brushing up on your retirement planning, education is key to staying ahead.

Make low rates work for you

Periods of low interest rates can feel like a relief, but they’re also a unique opportunity to get ahead financially. By being intentional with your extra cash flow, you can reduce debt, build wealth, and prepare for the future.

Remember, the smartest financial decisions often require discipline and planning. Use this time to take control of your money and set yourself up for long-term success.

Source

This article was sourced from the Vantage Wealth Financial Knowledge Centre and written by Vanessa Stoykov, statistics accurate as at 12th of February, 2025.  The Knowledge Centre provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances. Vantage Wealth Management Pty Ltd has representatives who are authorised to provide personal financial advice.

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Our brains are susceptible to certain automatic thought patterns, and fighting against them can be a challenge at the best of times. Sometimes, the solution is to ask how we can align ourselves with these thought patterns so that they actually help us rather than hurt us.

Below, we look at some of the mental shortcuts people often rely on when conducting their financial affairs, and whether we should use them more often or discard them altogether.

 

 

Mental Shortcuts that Might Not Serve Us Well 

“Retirement is too far away to worry about now”

We’re probably all guilty of putting some things off, but when it comes to retirement planning you might really be doing yourself a disservice. Yes, it can be tough to think seriously about something that might still be far away, but the good news is that there are things pre-retirees can do now that can have a massive impact, like making extra super contributions. This goes doubly so if you’re younger, considering you’ll have several decades for compound interest to work its magic.

“I need to have a detailed budget or retirement plan”

Most people don’t have the time or inclination to apply such a fine level of attention to their finances, and at the end of the day the effort required can risk putting you off the entire endeavour.

Here, it might help to start with easy stuff and not trying to put undue barriers in front of you. Think about ways you can automate your finances, like setting up an automatic monthly deposit from your salary into your super or emergency fund. You don’t need a budget for that — it’s just a matter of putting something in.

“I don’t have any spare money so there’s not much I can do”

Rising costs of living are taking their toll on many households. But there are things you can do to bolster your finances that don’t require you to save a cent more. Changing your super from a low growth to high growth option, if that suits your circumstances, is just one example.

Another is adjusting the level of insurance you have. Even if you increase your insurance, this doesn’t necessarily cost you anything out of your cash flow — it could come out of your super — and while it would reduce your super balance, it could significantly reduce the risk of your family becoming destitute in the event of your death or permanent disability.

“What is familiar is best”

Many people don’t think this explicitly, but a glance at our investment strategy often reveals how much it informs our thinking. Maybe we’re focusing on one asset class (such as property) to the exclusion of others, or maybe we’re limiting our share portfolio to Australian companies because we don’t know much about the international scene.

Here’s where small amounts of financial education can help. You don’t need to become an expert in a particular asset class —  you just need to increase your familiarity with it. When it comes to shares, that might be as simple as looking into a fund’s holdings and seeing how many names you recognise.

 

 

Mental Shortcuts that can Benefit Our Finances

“Do nothing”

This might seem counterintuitive, but so long as you’ve got the basic fundamentals sorted (e.g. your super is set to a suitable investment option, you have an appropriate level of insurance, and you have automatic contributions set up), then it’s often a worthwhile approach.

Of course, you’ll need to review things if your circumstances change. For example, if you start a family you might need to adjust your insurance, and if you get a pay rise you might be able to make larger contributions to your super or mortgage. But after you’ve done those few basic steps you probably won’t need to stray too far from the original plan, at least until you get close to retirement.

“Don’t pay too much attention”

If you’re looking at the stock market every day, occasional losses that are part and parcel of investing might make you jittery. And any hasty decisions you make in that anxious state, such as switching all of your superannuation into your fund’s cash option, might prove disadvantageous over time.

You might be better served by paying less attention to some of the noise (that is, the stuff that is happening in the short-term that often has a high degree of uncertainty) and more on the longer-term, slow-moving, unexciting things, like the average return on the All Ordinaries Index over the last 30 years.*

*Remember that when making investment decisions, past performance isn’t a guarantee of future performance.

Source

This article  was written by Simon Russell and was sourced from the Vantage Wealth Financial Knowledge Centre .  The Knowledge Centre provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances. Vantage Wealth Management Pty Ltd has representatives who are authorised to provide personal financial advice.

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At Vantage, we have long advocated for building well-diversified portfolios to ensure stable long-term performance for our clients. While many investors understand the benefits of allocating
to Australian Equities, Global Equities and Fixed Income, the potential of Listed Property and Infrastructure sectors often remains under appreciated. This paper aims to detail the strengths and weaknesses of investing in Listed Property and Infrastructure, two asset classes that can play a crucial role in enhancing portfolio diversification and resilience.

 

Defining the Sectors

 

Listed Property, also know as Real Estate Investment Trusts (REITs), represents publicly traded companies that either own, develop or operate real estate assets across various property types,
both domestically and globally. The main listed property sub-sectors include residential (single-family homes, multi-family apartments, student housing), commercial (office, retail, hotels, hospitality), industrial (warehouses, manufacturing facilities, logistics, data centres, self-storage) and healthcare (hospitals, medical offices, senior housing).

Listed Infrastructurecomprises of publicly traded companies that own, develop or operate physical infrastructure assets critical to economies and societal functioning. The main listed infrastructure sub-sectors include transportation (toll roads, airports, ports, freight and passenger railways), utilities (electric, gas, water, renewable energy), energy (oil & gas storage and transportation, pipelines, midstream energy) and communications (wireless communication towers, data centres).

 

Benefits of Investing in Real Assets like Property and Infrastructure

 

1. Stable and Predictable Cash Flows: Listed property and infrastructure companies generate consistent income streams due to the nature of their assets. Long-term leases in real estate and
   regulated revenue models in infrastructure provide reliable cash flows. This stability often results in attractive dividend yields.
2. Inflation Protection:The income streams of real assets include built-in inflation protection mechanisms, allowing operators to adjust pricing as inflation rises. Many real estate leases have rent increases linked to inflation, while infrastructure assets often have contracts permitting inflation-linked price adjustments. This feature helps preserve an income streams real value over time.
3. Portfolio Diversification: Incorporating real assets enhances portfolio diversification due to their distinct characteristics compared to traditional stocks and bonds. They typically have low correlations with other asset classes, reducing overall portfolio volatility. Additionally, different sectors within real assets respond uniquely to economic factors, providing further diversification benefits.
4. Defensive Characteristics: Listed infrastructure exhibits defensive traits, often performing well during economic downturns. The essential nature of these assets—housing, energy, and transportation ensures demand is consistent, regardless of economic conditions. Long-term contracts provide insulation from short-term fluctuations, therefore adding stability to portfolios during market turbulence.

 

Risks of Investing in Real Assets like Property and Infrastructure

 

1. Market Volatility: Listed property and infrastructure companies are subject to stock market fluctuations. While share prices can be influenced by broader market sentiment and economic
   conditions, historically during market downturns volatility in listed property and infrastructure is less than in traditional stocks due to the essential nature of their assets and the stability of their long-term contracts and cash flows. Over the longer term listed property and infrastructure has provided investors with attractive risk-adjusted returns that outpace inflation.
2. Interest Rate Sensitivity: Real assets are often capital-intensive and rely on debt financing. As interest rates rise, borrowing costs increase, potentially impacting profitability and asset valuations. Higher interest rates can also enhance the appeal of floating-rate investments from a yield perspective, which may potentially reduce demand for real asset investments. This sensitivity to interest rates can lead to short-term underperformance during periods of monetary tightening.
3. Regulatory and Political Risk: Property and infrastructure assets can be heavily influenced by government policies and regulations. Changes in zoning laws, environmental regulations or infrastructure spending priorities can potentially impact asset values and operational costs. Political instability or shifts in government stance towards private ownership of essential assets can also pose risks to investors in the infrastructure sector. Due to the nuances of these regulatory and political risks, it is important to co-invest with experienced managers who have strong expertise in the sector, as they can better navigate these complex landscapes and mitigate potential risks.

 

Advantages of Investing Globally Versus Locally

 

The main benefit of investing globally in listed infrastructure and listed property is the vastly expanded range of investment opportunities compared to the local Australian market.

Global Listed Infrastructure

The Australian listed infrastructure market has significantly consolidated since 2005, leaving only four essential infrastructure companies on the ASX (APA Group, Atlas Arteria, Auckland International Airport and Transurban Group). This limited domestic market necessitates that Australian investors look globally for meaningful exposure to diversified infrastructure assets. In contrast, global listed essential infrastructure offers access to over 130 companies across multiple infrastructure sub-sectors. This broader universe provides greater diversification opportunities and the potential to capitalise on global infrastructure trends.

Global Listed Property

The Australian REITs (A-REITs) market is highly concentrated with only 38 REITs in the S&P/ASX 300 Index, one company (Goodman Group) represents over one third of the A-REIT index and the top five companies account for about 64% of the A-REIT index. A-REITs are primarily limited to retail, office, and industrial properties, resulting in sub-sector concentration. In contrast, the global listed real estate universe includes over 300 Global REITs across a wider range of sub-sectors. By investing globally, investors can access a more diverse range of property sub-sectors, geographical markets and economic drivers.

 

The Benefits of Active Management

Active management in listed property and infrastructure offers several advantages over passive index investing.

1.   Expertise and Opportunity Identification

Experienced managers can leverage their expertise to identify undervalued companies and capitalise on emerging opportunities.

2.    Flexibility and Risk Mitigation

Active management provides flexibility to adjust portfolios rapidly in response to changing or challenging market conditions, helping to mitigate risks associated with specific companies, regions or sub-sectors in passive indexes.

3.    Navigating Benchmark Complexity

Due to the varying definitions of what is considered essential real assets, there is no universally used benchmark for listed global infrastructure and listed global real estate. This results in many
different ‘passive’ ways to invest in listed property and infrastructure.

 

Outlook

The past 24 months have presented significant challenges for global listed property and infrastructure investing, which are typically considered ‘longer duration’ assets due to their long term stable and predictable cash flows extending in some instances beyond 30 years. This characteristic has historically resulted in a negative correlation between short-term performance and longer-term bond yields. Recent underperformance has largely been driven by elevated long-term bond yields, a consequence of accelerated inflation in the wake of the COVID-19 pandemic and subsequent monetary tightening by global central banks.

As we enter a new phase where central banks are beginning to cut rates, we anticipate a shift in market dynamics. Company fundamentals are expected to play a more prominent role in driving share price performance for global listed property and infrastructure companies. This evolving environment offers a favourable outlook for global listed property and infrastructure, presenting attractive opportunities for long-term investors due to their unique characteristics and potential for
stable returns.

* This article contains purely factual information and/or general advice and does not constitute personal financial product advice.  The content of this article does not take into account your personal objectives, financial situation or needs and you must determine whether it is appropriate to your situation.  We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

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About the Author:

Anthony Nguyen – Head of Investments – Vantage Wealth Management

Anthony commenced his career in the financial services industry in 2018, bringing a strong educational background to his role. He holds a Bachelor of Commerce from the University of Western Australia and a Master of Finance from Curtin University, where he received the Curtin School of Economics and Finance Head of School Prize for graduating at the top of his class. He has also successfully passed the CFA Level 2 exam.

As the Head of Investment at Vantage Wealth Management, Anthony is responsible for overseeing investment due diligence, investment governance and portfolio management of the Vantage Managed Accounts. He is an integral member of both the Vantage Investment Team and the Vantage Investment Committee.

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