ANZ Smart Choice Super Investor Update : Member Update Winter 2013
In response, the official growth rate has slipped below 8%. While this has panicked markets, the focus now for China is the quality and long term sustainability of growth and not the headline rate. The Government justifiably wants to avoid markets bubbles, which is why it is clamping down on improper business lending. The Reserve Bank of Australia (RBA) will be watching China intently when setting interest rates. The RBA will also monitor markets to see if the recent falls in the Australian dollar are sustained. The hope is that, over time, a lower dollar will boost exports and help fill the gap left by a scaling back of investment by mining companies. Despite this, we expect rates are more likely to fall further in 2013 which suggests that the risk pendulum will continue to favour growth assets. Growth sectors Australian shares Continuing low Government bond yields will help stocks that pay high dividends. Further signs of cyclical recovery should help growth and value stocks, and small caps. Mining stocks and commodity prices will be influenced by the growth outlook in China. International shares Returns will vary across regions. US and Japanese stocks will continue to benefit from central bank stimulus. European markets remain vulnerable to political risk, though central bank actions have reduced this considerably. While valuation in Asian emerging markets look attractive, much will depend on the outlook for China. Australian listed property Listed property's good yield potential against bonds could come under pressure if monetary easing is wound back. With the current high prices, it suggests limited capital growth potential for the remainder of 2013. Global listed property Listed property's good yield potential against bonds will be influenced by policy developments. The opportunities will vary across regions. Defensive sectors Australian cash With growth below potential and the Australian dollar still elevated relative to fundamentals, we believe there is scope for further rate cuts. Australian fixed interest The prospect of further rate cuts along with demand from investors seeking yield is likely to keep Australian Government bond yields at their current low levels. This, in turn, will support demand for quality corporate credit that offers higher yield potential. International fixed interest Stimulatory monetary policy in the US, Japan, UK and EU is likely to keep safe-haven Government bond yields at low levels. There are return opportunities from Government bonds of emerging countries with strong budget positions and highly-rated corporate credit.
Member Update Autumn 2013
Member Update Spring 2013