Invest
Why franking credits are a bigger sweetener than ever
Franking credits were a hot election issue this year, and now that the rules remain untouched, there is significant opportunity for Australian investors in the new financial year.
Why franking credits are a bigger sweetener than ever
Franking credits were a hot election issue this year, and now that the rules remain untouched, there is significant opportunity for Australian investors in the new financial year.
The franking credits system in Australia gives domestic investors an opportunity that is unmatched by global standards, according to ETF Securities CEO Kris Walesby.
In the current market, yields and capital growth are soft in property and cash-based investments. However, with an unchanged franking credits system, investing in Australian shares presents a comparatively strong opportunity for portfolio growth, according to Mr Walesby.
“Australia, even with low interest rates, it still has something that does not exist in any other country in the world, which is franking credits,” said Mr Walesby.
Mr Walesby also believes Australia’s yield return is second to none in the western world, based on its current and track record.
“The dividend yield in Australia is high and it has historically been high. Higher than most developed nations, although Australians don’t know that, but it is the case.
“Something running, like the ASX 200, at 5 per cent yield is non-standard in America. The UK is less than 2 per cent. Then in Australia, you have franking on top of it. So you get this extra kicker,” said Mr Walesby.
Unmatched opportunity
These high yields, combined with a tax benefit, combine to create returns that are tough to recreate in other markets.
“As an Australian, you can in a yield sense get 5-7 per cent a year without doing much a year. With the compounding effect, it only takes 10 years to effectively double your money,” said Mr Walesby.
“It is difficult to be an Australian and not have a substantial amount of money invested in Australia. It’s not even domestic bias, it’s just the structure of the market makes it attractive for any investor,” said Mr Walesby.
RELATED ARTICLES
About the author
About the author
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
