Why a falling $A can boost your portfolio returns again this year
There is another opportunity to play the weakening $A again this financial year, and not only for international investing. A year ago we forecast the $A would fall significantly. At the time we said the potential currency decline created an opportunity, particularly for savvy SMSF and self-directed investors, to shift funds offshore and benefit from the weakening local currency. That play paid off. A portfolio that allocated 30% offshore would have returned around 7.5% – that’s double the return of the Australian share market and with a lot less risk and volatility. The success of the strategy highlights that asset allocation strategies like this are becoming increasingly important for SMSF and self-directed investors. The good news is we think that play is on again this financial year. (VIEW LINK)
The Clime Group is a respected and independent Australian Financial Services Company, which seeks to deliver excellent service and strong risk-adjusted total returns, closely aligned with the objectives of our clients.