• If Labor returns to power we may see a spike in share buy-backs, should you participate? read here

Do you have enough global equities exposure in your portfolio?


Do you have enough global equities exposure in your portfolio?

In this week’s video insight David compares Australia’s top five businesses to the global top five and provides various observations. Interestingly, there are only three non-American businesses in the global top ten. Do you have enough global equities exposure in your portfolio?

If you would like a simple way to invest in high quality global businesses you can view more information on our global funds here.

The Montgomery Global Funds own shares in Apple, Facebook, Alibaba, Electrolux and Microsoft


Chief Executive Officer of Montgomery Investment Management, David has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. Hi David

    With the proposed changes Labor intends to implement to the excess Imputation credits if elected at the next election it’s all the more reason to own more overseas shares as they tend to have low dividend yields but higher capital gains. The capital gains discount even if it’s reduced from 50% to 25% as proposed by Labor is still a good counter measure to Labors proposal. What changes will happen to the discount for super funds remains to be seen – currently capital gains in Super after 12 months only pay 10% tax whilst in the accumulation phase.

    SMSF in the pension phase are the ones that will be most affected by Labors proposal as they pay no tax when in pension mode so all the franking credits are lost – big problem if your fund is loaded up on the Banks and other high yielders which I suspect most are.

    It’s likely that Investors will load up more on Overseas shares and Australian Growth stocks at the expense of high yielding local shares – That will play into the hands of Fund managers like Montgomery ,so that is one positive aspect of the change if it’s implemented. There is more than one way to skin a cat and I’m sure Investors and Planners are already thinking about strategies to overcome any problems.

    • Hi Max, the original design of the dividend imputation system was to avoid double taxation – which seems fair – but when the ATO sends cash to equity holders which are also low tax rate payers (post the law change of 1/7/00) then Corporate Australia has preferred to maintain a high dividend payout ratio rather than reinvesting in growth. The maturity of our economy, the increasingly oligopolistic nature of many of our industries and our poor overseas track record has generally reinforced this view.
      With the Superannuation pool growing at around double the rate of our economy, a greater proportion of investment funds will logically go overseas. And when you think the Dow Jones Industrial Average declined from 2246.7 to 1738.4 (-22.6%) on 19 October 1987, and today its 25,007.0, the compound annual return has been 9.2% (post crash) and 8.25% (pre-crash). Add dividends to that, and you come back to the very long-term average annual total return for equities of typically around 10.0-10.5 per cent.

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