Investment

Investment is one part of a number of solutions we can provide. Depending on your need we can structure a short term solution or a long term portfolio to build your wealth, be that for growth or for a income. The following is a short explanation of each investment type that can be used individually or combined to provide to you the best outcome for your situation. Take a moment to read over each to give you a better understanding, again if you have an questions please do not hesitate to contact to discuss further. We look forward to building your financial future.

Cash Management Trusts

Cash Management Trusts act like a bank account while providing slightly higher rates of return from investing in the short-term money market and Commonwealth government backed securities.

Most Cash Management Trusts have many of the same features of an ordinary bank account, including personalised cheque books and automated banking facilities.

Interest earned is fully assessable for income tax purposes in the year that it is earned, even if you reinvest it. Income may be subject to provisional taxation, depending on your circumstances.

Australian Fixed Interest Trusts

Fixed Interest investments are especially attractive when interest rates are high because the rates can be "locked in" for a designated term. There is also the prospect of some capital appreciation as interest rates fall. Examples of fixed interest investments include government bonds, debentures, term deposits, unsecured notes and bank bills.

Fixed Interest Trusts aim to produce a regular income with some capital growth over the medium to long term. Interest earned on your investment is fully assessable for income tax purposes in the year it is paid even if the interest is reinvested. Income may be subject to provisional taxation.

Australian Equity Trusts

Equity or share funds are designed for medium and long-term investors seeking capital growth and a tax effective income.

The big advantage of investing through a managed fund is that you can gain exposure to a wide range of shares with only a small amount of money. Dividend imputation applies to shares that have already been taxed in Australia. Dividends paid out are called franked dividends and investors receive a tax rebate on them, making this kind of investment extremely tax efficient.

Professional managers take care of the administration of your portfolio and tax reporting, tasks you personally would have to perform if making direct investments.

Insurance Bonds

A useful way to have your money managed for you is to buy a life insurance product such as an Investment Bond.

Insurance bonds deliver returns tax-paid to the investor. There are two types of bonds available, Capital Guaranteed and Market Linked.

Capital Guaranteed bonds are designed for the more conservative investor and the insurance company guarantees the initial capital investment plus declared interest credited to the account.

Market linked products are designed to produce better long-term returns and by their very nature, have a more aggressive asset allocation. The asset allocation for market linked products can have a larger proportion in shares with fewer cash investments. Because of this the capital is not guaranteed, therefore investors' funds may increase or decrease in line with market conditions.

Diversified Income / Balance / Growth Trusts

Diversified funds are designed for medium term investors who seek capital growth from a diversified pool of investment assets.

A balanced fund tends to provide an even spread of investments over growth assets and income producing assets; for example shares, property, fixed interest and cash. By investing in different assets, the effect of a downturn in any one market is reduced, providing higher stability for the investor.

Capital stable/secure funds will have a higher portion of fixed interest and cash type investments to lower the risk, whereas a growth funds will have a higher portion in shares - a higher risk but generally a higher return.

Property Trusts

There are two main types of Property Trusts available.

Property Securities Trusts invest in property trusts and property companies listed on the stock market. The returns are in the form of income from rental of the properties and capital growth if the trust/share price increases. This type of Property Trust is highly liquid as the investments can be bought and sold like shares.

The other type of Property Trust invests directly in a range of properties and can provide returns in the form of rental income and capital growth of the properties. Regular valuations are undertaken to establish the current market value and therefore any capital growth. This type of trust is not as liquid and usually has a minimum withdrawal period of 6-12 months.

International Trusts

There are many reasons why investors should consider investing part of their money overseas.

· It allows the investor to spread the risk by being in a mix of markets and currencies.

· Investing internationally provides the opportunity to invest in industries and companies that may not have operations in Australia.

· The Australian market only represents 1-2 per cent of the world’s capital and has historically not performed as well as world markets.

While it can be quite complicated for individuals to invest overseas directly, investing through a managed fund offers simplicity and the experience of the fund manager involved. You can choose from funds that invest in a number of countries or funds that focus on one country or region.