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During recent client review meetings, I've noticed two concerns coming up regularly. The first is the growing dominance of large US technology companies and whether current valuations can continue rising. The second is rising government debt levels around the world, particularly in the United States and Australia, and whether governments are willing or able to address these issues over the long term.
The recent approval of the first-ever spot Bitcoin ETFs by the SEC in America has sparked excitement and speculation. A spot Bitcoin ETF is a mechanism that allows investors to gain exposure to Bitcoin through the stock exchange which eliminates the need of investors having to buy actual Bitcoin through an exchange and storing and securing it in a wallet. With the approval of spot Bitcoin ETFs, Bitcoin exposure becomes more accessible to retail investors.
The COVID-19 pandemic has brought about significant changes in the commercial office and retail property landscape, with work-from-home and home shopping becoming the new norm across the globe. The occupancy rates of commercial properties in central business districts have been heavily impacted, with cities like Melbourne and Sydney reporting occupancies rates of 47% and 61% respectively (as of February 2023, according to Property Council members). This, combined with the sudden rise in interest rates has led to a significant increase in debt servicing costs for these properties. As a result, the valuations of large CBD offices and other commercial properties are expected to decrease in value.
When the Future Fund - which is Australia’s $200 billion sovereign wealth fund - writes a position paper titled “The Death of Traditional Portfolio Construction?” it is sure to get the attention of the media and our clients alike. Portfolio construction has become a hot topic from late 2022, which is understandable considering cash was the best performing asset class. In fact all other asset classes were negative for the year, which last occurred in 1994 and has only occurred four times in the last 50 years.

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You may have seen the headlines about the collapse of the Shield and First Guardian Master Funds. It’s a confronting story, with almost 12,000 Australians affected and over $1.2 billion of retirement savings gone. Many only found out only when a letter arrived saying their super had vanished. It’s the kind of thing that makes all of us stop and check our own arrangements.
You’re retired and you’ve set yourself up well financially. You have no debt, no job to lose, no (or little) taxable income, no kids eating your fridge out and ready access to capital. You’re the envy of every financially stressed 40 year old with years of pressure head of them; possibly your own children. You wonder how you can help but you don’t want to just hand over cash without a purpose, and you also don’t want to create dependency or expectations.