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There was a dramatic decrease in the number of SMSF wind-ups from 2018 to 2023, indicating that the SMSF sector is outperforming APRA funds in both returns and customer satisfaction, says a leading educator.

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Shelley Banton, head of education for ASF Audits, told SMSF Adviser the latest SMSF quarterly statistics from the ATO reveal a consistent trend in wind-ups since the 2021 fiscal year, notably, a 9 per cent decrease in 2022, followed by a further 33 per cent decline in the 2023 fiscal year.

Keeping track of all documents relating to an SMSF trust deed is important if an estate planning issue arises, says an industry expert.

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Scott Hay-Bartlem, partner at Cooper Grace Ward Lawyers and board member of the SMSFA, said being able to physically produce documents, including trust deeds, reversionary pension information, death benefit documents, and even living wills, need to be kept safe and secure, but also be ready at hand when needed.

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Hayley Mitchell, partner with Cooper Grace White Lawyers, said many decisions trustees make will involve an exercise of discretion.

The ATO has found $637 million of superannuation savings has left the system due to illegal early access carried out through SMSFs.

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The figures were released by the regulator today at the SMSF Association National Conference 2024 in Brisbane, where ATO superannuation and employer obligations deputy commissioner Emma Rosenzweig provided the first report on an illegal early access estimate project revealed late last year.

“Recently it was announce for the first time that we have found for the 2019/20 year an estimated $381 million of super has been illegally withdrawn by trustees of SMSFs,” Rosenzweig said.

“This figure would have been half-a-billion dollars if we hadn’t protected over $125 million leaving the system as part of our new registrant program.

“In the 2020/21 year, we estimate over $256 million of super has been illegally accessed, with almost $170 million additional that was protected at registration.”

“These are large amounts of money and they don’t include prohibited loans across those two years, so a total of $637 million of superannuation savings has left the system illegally through SMSFs.”

She added prohibited loans were also of concern and in each of the two financial years mentioned, SMSFs entered into more than $200 million in prohibited loans each year, but 75 per cent were repaid.

Newly established SMSFs were more likely to engage in illegal early access or prohibited loans compared to established funds and around two-thirds of the $930 million involved in illegal access or loans over the two years came from people entering the system with no genuine intention to run a fund, she noted.

She said the ATO formed its estimate using audit reports and examining funds that had yet to lodge an annual return and would continue to do so each year as the regulator remained concerned illegal early access was ongoing.

“We looked at all auditor contravention reports of funds that have lodged in those two years where those reports had noted a contravention that could amount to illegal early access and then for those SMSFs that have not lodged, we undertook a random inquiry program and a statistically valid sample,” she said.

“Through the results of both of those we have come up with this estimate across the entire population.

“So will we be doing it every year? Yes.

“We do see already in 2021/22 there are indicators that suggest that illegal early access is still prevalent. We continue to see many new trustees entering into the system with the sole intent of raiding their retirement savings, sometimes facilitated by promoters charging a large fee.”

 

 

Jason Spits
February 21, 2024
smsmagazine.com.au

 

Region-by-region economic outlook and latest forecasts for investment returns.

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What might shipping detours of more than 3,000 nautical miles mean for goods prices and broad inflation rates? Not a lot, for now. Shipping contracts are typically locked in for a year or more, and shipping costs account for only about 1% of core goods prices. That said, freight rates for ships to move immediately out of Chinese ports have doubled in recent weeks, and Middle East-related risks to the global inflation outlook remain elevated.

As shipping companies avoid the Red Sea, container ship costs spike

^{Notes: The Shanghai Containerised Freight Index is based on spot rates, or rates for immediate payment and delivery, in U.S. dollars per 40-foot-equivalent units for U.S. destination ports and 20-foot-equivalent units for other global destination ports.}

^{Sources: Shanghai Shipping Exchange and Bloomberg as of January 12, 2024.}

“The steady decrease in the pace of inflation around the world in recent months is encouraging for policymakers,” said Shaan Raithatha, a Vanguard senior economist. “However, should the tensions in the Middle East escalate or continue for an extended period, the risk does increase for an upswing in inflation through higher goods prices, as well as through the potential for energy supply disruption.”

Vanguard expects central banks in developed markets to cut policy interest rates in 2024, though only in the second half of the year. We believe that market expectations for earlier cuts don’t acknowledge the challenges of bringing inflation down that last mile to many central banks’ 2% targets, given stickier wage-related services inflation. The risk of a new advance in goods prices due to protracted geopolitical tensions could give central bankers something else to consider.

Outlook for financial markets

Our 10-year annualised nominal return and volatility forecasts are shown below. Equity returns reflect a range of 2 percentage points around the 50^th percentile of the distribution of probable outcomes. Fixed income returns reflect a 1-point range around the 50^th percentile. More extreme returns are possible. 

5th percentile	25th percentile	50th percentile	75th percentile	95th percentile	Volatility
Australian Equities	-3.3%	2.1%	5.6%	9.1%	14.4%	21.5%
U.S. equities (unhedged)	-4.0%	1.3%	5.0%	8.8%	14.6%	19.9%
Emerging markets equities (unhedged)	-4.1%	2.9%	7.3%	11.6%	18.3%	28.0%
Global ex-Australia equities (unhedged)	-2.3%	2.7%	6.1%	9.7%	15.1%	19.4%
Global equities (unhedged)	-2.2%	2.7%	6.1%	9.6%	15.0%	19.2%
Australian REITs	-3.7%	1.9%	5.4%	8.9%	14.2%	5.5%
Australian aggregate bonds	3.5%	4.2%	4.8%	5.3%	6.1%	5.5%
Australian government bonds	3.2%	4.0%	4.5%	5.1%	5.9%	5.8%
Australian Linkers	1.9%	3.1%	4.0%	4.9%	6.4%	5.5%
Australian Credit	4.4%	5.1%	5.6%	6.1%	6.9%	4.4%
Global bonds (hedged)	3.1%	4.2%	4.9%	5.7%	7.0%	4.7%
Global government bonds (hedged)	2.8%	3.9%	4.6%	5.4%	6.6%	4.9%
Australian cash	2.8%	3.7%	4.4%	5.2%	6.2%	1.9%
Australian inflation	0.1%	1.3%	2.1%	2.9%	4.1%	2.4%

 

^{Notes: These probabilistic return assumptions depend on current market conditions and, as such, may change over time.}

Region-by-region outlook

Australia

Leading indicators suggest that Australia’s economy has improved somewhat since mid-2023. But they also suggest that economic growth is below trend, and inflation risks that skew to the upside mean that further monetary policy rate hikes aren’t off the table.

• We expect both growth and inflation to be weaker than consensus as restrictive monetary policy takes hold. Our base case is that Reserve Bank of Australia (RBA) rate hikes are complete. However, we believe that the RBA will start to cut interest rates only late in 2024, because we expect inflation to fall to the RBA’s target only in 2025.
• We expect real (inflation-adjusted) GDP growth of 0.75%–1.25% for all of 2024, with about a 40% probability of a recession over the next 12 months.
• The unemployment rate remained at 3.9% on a seasonally adjusted basis in December. We expect an unemployment rate that touched 50-year lows after the pandemic to rise throughout 2024 as financial conditions continue to tighten in a higher-rate environment.

United States

We expect the core Personal Consumption Expenditures index—the Fed’s preferred inflation measure, which excludes food and energy prices—to fall to 2.3% on a year-over-year basis by the end of 2024. It was 3.2% in November. The last mile of the journey back to 2% inflation will be challenging, however, owing to the “sticky” nature of services inflation.

• We believe that market expectations for a Federal Reserve interest rate cut in March are overly optimistic. It likely will be midyear before policymakers are confident that they have reined in inflation sufficiently to start cutting their target for short-term interest rates.
• In its latest Summary of Economic Projections (SEP), the Fed suggested it would trim its target for short-term interest rates with three 25-basis-point cuts in 2024. (A basis point is one-hundredth of a percentage point.) Vanguard believes the Fed will go further. We foresee the equivalent of six to eight quarter-point cuts—a total of 150 to 200 basis points—driven not by a soft landing but by the onset of a mild recession late in the year.
• A higher unemployment rate than the Fed envisions would be commensurate with a contraction in GDP growth. We foresee a 2024 year-end unemployment rate of 4.8%, higher than the 4.1% envisioned in the SEP. For now, the labour market appears healthy.
• We foresee full-year 2024 real (inflation-adjusted) U.S. GDP growth of 0.25%–0.75%.

China

Amid weak domestic consumption and private investment, stimulus will need to play a role in the revival of China’s economy. An indication of the government’s approach came on January 2, when the People’s Bank of China (PBOC) announced it had issued CNY 350 billion (USD 49 billion) in loans in December. The government chose to stimulate via its “pledged supplementary lending” facility, which provides support during property downturns. Vanguard expects the funds will be used toward supply-side projects, such as social housing construction and urban village renovation.

• We expect real (inflation-adjusted) economic growth of 4.5%–5% in 2024, near our expectation of a 5% government growth target.
• To mitigate deflationary pressure, we expect the PBOC to ease its policy interest rate from 2.5% to 2.2% in 2024, as well as to cut banks’ reserve requirement ratios. The PBOC left its one-year medium term lending facility (MLF) policy rate unchanged at 2.5% on January 15. Vanguard doesn’t consider an unchanged policy rate surprising because a cut at this point would have weighed on banks’ profitability. However, the volume of MLF operations increased, suggesting an injection of liquidity into the market.
• We expect prices to climb out of deflationary territory over the course of 2024, with headline inflation in a range of 1.5%–2% and core inflation of 1%–1.5%, amid expectations of higher food prices. Both would be below the PBOC’s 3% inflation target.

Euro area

High-frequency data suggest that a further mild contraction occurred in the euro area economy in the fourth quarter. A preliminary estimate of fourth-quarter GDP, scheduled to be released January 30, could confirm that the economy fell into recession in the period after GDP contracted by 0.1% on a seasonally adjusted basis in the third quarter.

• The economy is slowing broadly in line with our expectations at this stage of policy tightening by the European Central Bank, and we continue to expect that a recession will be mild. We foresee full-year 2024 real (inflation-adjusted) GDP growth of 0.5%–1%.
• Markets are pricing in ECB rate cuts totalling 140 basis points, beginning in the second quarter. We believe that rate cuts will total only 75 basis points and won’t begin until the middle of the year. (A basis point is one-hundredth of a percentage point.) Our outlook is predicated on the ECB’s own forecasting model. A risk to our view is that the ECB’s reaction to GDP and inflation data could deviate from the past as the central bank navigates a narrow path between inflation and recession risk.
• Vanguard cautions that only about 60% of the disinflationary process in core inflation is complete. Most of the progress still to be achieved is concentrated in stickier services inflation, as two-thirds of the services basket continues to show inflation rates above 3%.
• We anticipate a softening in the labour market as economic activity falls below its potential amid restrictive monetary and fiscal policy. We expect the unemployment rate to rise to an above-consensus range of 7%–7.5% in 2024, illustrating our scepticism that a “painless disinflation” is attainable.

United Kingdom

As in the euro area, economic growth in the U.K. continues to hover near zero. After modest growth in the first half of 2023, the U.K. economy contracted by 0.1% in the third quarter, a second GDP estimate showed. That was a revision from a preliminary estimate of 0% growth. High-frequency data suggest the economy stagnated or contracted minimally in the fourth quarter, in line with our outlook for a mild recession.

• For all of 2024, we foresee below-trend GDP growth in a range of 0.5%–1% as the effects of contractionary monetary and fiscal policy are fully felt. As inflation falls, however, we expect economic activity to receive a modest boost from gains in real wage growth.
• We continue to foresee fewer and later Bank of England (BOE) rate cuts than the markets do. We expect 100 basis points of policy rate cuts in 2024 beginning in the middle of the year at the earliest, compared with market expectations for 120 basis points of cuts beginning in May or June. (A basis point is one-hundredth of a percentage point.)

Emerging markets

Some central banks in Latin America, including those in Chile and Brazil, have already begun to cut policy interest rates, and we expect further cuts in 2024. But the gaps between high rates of monetary policy and receding rates of inflation are wide, particularly in Latin America, meaning that monetary policies are restrictive. We expect them to remain so even amid rate cuts.

• In emerging Europe, where the gap between policy and inflation rates isn’t as large and policy is consequently less restrictive, we foresee first-half policy rate cuts amid economic growth concerns that are greater than in Latin America.
• In emerging Asia, where inflation didn’t run as high and growth prospects appear brighter, we don’t foresee rate cuts until the second half of 2024.
• We expect emerging markets GDP to grow mostly in line with consensus in 2024 and to a greater degree than that of developed markets. We anticipate real (inflation-adjusted) growth of around 4% for emerging markets broadly—around 5% for emerging Asia and 2%–2.5% for emerging Europe and Latin America.

Canada

Core inflation has gone sideways in recent months, complicating the calculus for the Bank of Canada (BOC), which we expect to be among the first developed market central banks to cut policy interest rates this year.

• We foresee Canada falling into a mild recession early in 2024, with recovery later in the year in response to expected monetary policy rate cuts. We anticipate full-year 2024 real (inflation-adjusted) economic growth of about 1%.
• We anticipate that BOC rate cuts could as much as halve the overnight rate, to a range of 2.5%–3%, by the end of 2024.
• We foresee core inflation falling to 2%–2.5% on a year-over-year basis, within the BOC’s target range, by the end of 2024, with house prices moderating in response to declining affordability.
• Employment was virtually unchanged in December and the unemployment rate held steady at 5.8%. We foresee the unemployment rate rising to 6%–6.5% in 2024.

 

^{Important information:}

^{The projections and other information generated by the Vanguard Capital Markets Model® regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. VCMM results will vary with each use and over time.}

^{The VCMM projections are based on a statistical analysis of historical data. Future returns may behave differently from the historical patterns captured in the VCMM. More important, the VCMM may be underestimating extreme negative scenarios unobserved in the historical period on which the model estimation is based.}

^{The Vanguard Capital Markets Model is a proprietary financial simulation tool developed and maintained by Vanguard’s primary investment research and advice teams. The model forecasts distributions of future returns for a wide array of broad asset classes. Those asset classes include U.S. and international equity markets, several maturities of the U.S. Treasury and corporate fixed income markets, international fixed income markets, U.S. money markets, commodities, and certain alternative investment strategies. The theoretical and empirical foundation for the Vanguard Capital Markets Model is that the returns of various asset classes reflect the compensation investors require for bearing different types of systematic risk (beta). At the core of the model are estimates of the dynamic statistical relationship between risk factors and asset returns, obtained from statistical analysis based on available monthly financial and economic data from as early as 1960. Using a system of estimated equations, the model then applies a Monte Carlo simulation method to project the estimated interrelationships among risk factors and asset classes as well as uncertainty and randomness over time. The model generates a large set of simulated outcomes for each asset class over several time horizons. Forecasts are obtained by computing measures of central tendency in these simulations. Results produced by the tool will vary with each use and over time.}

^{All investing is subject to risk, including the possible loss of the money you invest.}

^{Investments in bonds are subject to interest rate, credit, and inflation risk. Investments in stocks and bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.}

^{This article contains certain 'forward looking' statements. Forward looking statements, opinions and estimates provided in this article are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these statements. To the full extent permitted by law, Vanguard Investments Australia Ltd (ABN 72 072 881 086 AFSL 227263) and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions.}

 

 

By Vanguard
January 2024
vanguard.com.au

Investing success can mean different things to different people. Being clear on what success means for you is key to mapping out your plan.

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Although investing can seem perplexing and complex, success is largely within your control.

Having a tailored investment strategy can go a long way to reducing the stress and noise associated with investment decisions.

Vanguard has four guiding principles designed to help investors focus on what’s important to them and give them the best chance for investment success.

1. Create clear, appropriate investment goals

There is no one-size-fits-all plan for reaching financial objectives. Goals are unique to your situation, preferences, and aspirations.

Identifying and prioritising your financial intentions allows you to focus on what matters most, in an order that works for you. It also helps you decide where you’re willing to compromise.

Once you set and prioritise your goals you can figure out how much—and for how long—you’ll need to save.

The value any portfolio achieves over time is the sum of two elements: savings (the amount you put into your portfolio) and investment returns. Much of the discussion about investment success tends to focus on investment returns, but both elements are crucial in reaching a goal.

Time is a key factor here. For short time horizons, savings—which is within your control—is the driving force in achieving an investment goal. As the time horizon increases, investment returns increase in importance.

Savings and investment returns both contribute to the achievement of any investment goal

Over any given goal horizon, an investment balance is the sum of savings (the amount you put into your investment portfolio) plus the investment returns on the total amount invested.

Notes: The calculation for the contribution of savings and investment returns is as follows: Assuming a 4% real return (after inflation), we calculate how much an investor needs to invest annually to achieve a given investment goal for different time horizons, varying from 0 years (now) to 40 years. Savings represent the amount invested (the principal). Contributions are assumed to be the same every year relative to the year investing begins.

Source: Vanguard

2. Keep a balanced and diversified mix of investments

Shares can be risky, but so is avoiding them. While they can be more volatile in the short run, historically they’ve outperformed cash-equivalent assets in the long run.

Investors can reduce overall portfolio volatility while also safeguarding against unnecessarily large losses by spreading their investments across shares and bonds and among sectors and countries.

An appropriate asset allocation takes into account your risk tolerance—how much volatility you can tolerate in your portfolio—and risk capacity—your ability to withstand a loss in your portfolio (a reflection of your time horizon and cash flow needs).

Factoring in your time horizon and your tolerance for risk can lead to a tailored portfolio that’s suitable to personalised situations.

3. Minimise costs

Market movements and financial returns are hard to predict, but costs are often controllable. The two broad types of costs that you can minimise are (1) taxes and (2) investment costs, which include expense ratios, transaction costs, and sales charges.

Together, these costs cut into investment returns, sometimes significantly. To reduce these expenditures, and help improve returns, you can:

• Seek out lower-cost funds. The higher the investment costs, the higher the odds of market underperformance. Lower-cost investment funds have historically outperformed higher-cost investment funds.
• Implement tax-advantaged and tax-efficient investment strategies, where available. These strategies could include contributing more concessional contributions into your superannuation, which are taxed at 15%, minimising transaction activity to avoid triggering capital gains tax liabilities, and having a strategic plan for tax-efficient asset location

4. Maintain perspective and long-term discipline

Discipline in investing is the ability to adhere, over time, to an investment plan. It’s natural to want to react to market volatility, but acting on that emotion can lead to an impulsive decision, like panic selling during an unstable market.

Taking a long-term perspective can help you maintain discipline and avoid a potentially harmful emotional move.

Reacting to market volatility can jeopardise returns

What if investors shifted to cash at the bottom of the COVID downturn and stayed there until the market recovered?

Notes: Stocks are represented by the MSCI All Country World Index; bonds are represented by the Bloomberg Global Aggregate Bond Index (USD Hedged). Cash is represented by the Bloomberg U.S. Treasury 1–3 Month U.S. Treasury Bill Index. Returns are in nominal terms.

Sources: Vanguard calculations, using data from Morningstar, Inc.

Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

Staying the course can help increase your chance of success, but so can other actions, like making regular contributions to your portfolio, and increasing them over time.

Other actions that can increase the likelihood of reaching an investment goal including having a consistent plan to rebalance your portfolio, a disciplined spending strategy, and a regularly scheduled date to monitor and review your goals.

Vanguard’s four principles can help you focus on the aspects within you control so you can build tailored plans to help you achieve long-term investing success.

Important information and general advice warning

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer and the Operator of Vanguard Personal Investor. We have not taken your objectives, financial situation or needs into account when preparing this article so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for any financial product we make available before making any investment decision. Before you make any financial decision regarding Vanguard products, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard's financial products can be obtained at vanguard.com.au free of charge and include a description of who the financial product is appropriate for. You should refer to the TMD before making any investment decisions. You can access our IDPS Guide, PDSs, Prospectus and TMDs at vanguard.com.au or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This article was prepared in good faith and we accept no liability for any errors or omissions.

 

 

By Vanguard
January 2024
vanguard.com.au

Financial literacy around superannuation is poor for many lower-income people, who still question why they can’t access their funds until retirement age.

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Understanding the purpose of superannuation is difficult for many consumers who do not understand access is restricted until retirement as they view it as their savings, a financial literacy body has found.

Ecstra Foundation chief executive Caroline Stewart said confusion about the nature of superannuation is common and is raised by school students who attend the organisation’s financial literacy classes, as well as adults seeking financial help.

“Students find it very difficult to get their head around the fact that it’s taken out of their pay and they don’t get it back until they are 65,” Stewart said during a media briefing in Sydney yesterday.

“We can talk about compounding savings, but even your average adult really isn’t paying much attention to that and they also can’t access their super.”

She added this lack of understanding was borne out during the COVID-19 pandemic when the government allowed access to up to $20,000 of superannuation.

“In the discussion during COVID around people accessing their superannuation early, a lot of community organisations we work with said it was a huge issue because people saw that as free money, and particularly for people in lower earning categories, especially women, that money was never going back,” she said.

“You lose the tax advantage once it’s taken out and people didn’t really understand that, but did it because they had short-term needs they needed to address and saw super as their money.

“We work with a lot of financial counselling organisations and community legal centres and this is the tension in teaching people financial literacy.

“People with lower access to funds are quite often great budgeters because they know where every cent goes, but there is no money left over.

“So teaching someone how to budget is one thing, but if they don’t have money to live on, superannuation is irrelevant to them.”

 

 

February 1, 2024
Jason Spits
smsmagazine.com.au

 

2024 is very much a story of how quickly and how sharply rates will start coming down.

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Around the world, just like in 2023, financial markets, investors, and borrowers are firmly focused on what will happen to official interest rates.

But unlike last year, when rates were on the way up, 2024 is very much a story about how quickly and how sharply interest rates will start coming down.

Rising expectations around looming cuts to interest rates – a signal that central banks believe surging inflation levels are being brought back under control – provided a strong tailwind for share markets in December.

The Australian share market, when measured by the S&P/ASX 300, rose more than 7% over the final weeks of 2023. 

Higher for longer

The course of interest rates will remain a firm focus for most investors in 2024.

While the United States’ Federal Reserve Bank has indicated it expects to start cutting interest rates during this year, its December policy meeting minutes shed little light on when that process will begin. This will largely depend on the pace at which inflation levels continue to decline.

The Reserve Bank of Australia is in a similar boat. The RBA board will announce its next decision on interest rates when it meets for the first time this year on 6 February.

Vanguard’s just-released economic and market outlook for 2024 notes that “the persistence of positive real interest rates” will provide a solid foundation for long-term risk-adjusted investment returns over the next decade.

Vanguard forecasts that the spread between global equity and global bond returns is expected to be 0 to 2 percentage points annualised over the next 10 years. As such, we expect return outcomes for diversified investors to be more balanced over the next decade.

For those with an appropriate risk tolerance, a more defensive risk posture may be appropriate given higher expected fixed income returns and an equity market that is yet to fully reflect the implications of the return to sound money.

In the decade ahead, our forecast is for annualised earnings growth of 1.5% for Australian equities and 4.1% for global ex-Australia equities, supported by an expected growth rate in the U.S. that is well below that of past years but still higher than elsewhere.

Our bond return expectations have increased substantially. We now expect Australian bonds to return an annualised 4.3%-5.3% over the next decade, compared with the 1.3%-2.3% 10-year annualised returns we expected before the rate-hiking cycle began.

Similarly, for global bonds, we expect annualised returns of 4.5%–5.5% over the next decade, compared with a forecast of 1.6%-2.6% when policy rates were low or, in some cases, negative.

Diversification remains key

As always, having a diversified portfolio of investments is key because the returns from different asset classes and market segments vary from year to year.

Making tactical adjustments to a portfolio based on what’s happening on investment markets at any point in time, particularly when there’s a high level of turbulence, may seem logical.

Rather than making tactical changes, investors who stay aligned to their goals, who are well diversified, who minimise their costs, and who have the discipline to stay invested, even during periods of heightened volatility, have the best chance of investment success over the long term.

Important information and general advice warning

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer of the Vanguard ETFs and the Operator of Vanguard Personal Investor. We have not taken your objectives, financial situation or needs into account when preparing this publication so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for Vanguard ETFs before making any investment decision. Before you make any financial decision regarding Vanguard ETFs , you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard's financial products can be obtained at vanguard.com.au free of charge and include a description of who the financial product is appropriate for. You should refer to the TMD for Vanguard ETFs before making any investment decisions. You can access our IDPS Guide, PDSs Prospectus and TMD at vanguard.com.au or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This publication was prepared in good faith and we accept no liability for any errors or omissions.

 

Tony Kaye, Senior Personal Finance Writer
January 2024
vanguard.com.au