The ESG Investing Landscape in 2022: A Year of Two Halves

The year 2022 was a year of two halves for ESG investing. The first half was challenging, as the energy market disruption in early 2022, coupled with surging inflation and interest rate expectations, placed small and micro-cap stock valuations under pressure. Resources and energy stocks (underweight sectors in ethically screened funds) performed strongly, while ESG-focused funds lagged behind the broader market.

However, the second half of the year saw a more optimistic outlook for inflation and interest rates. Earnings-focused companies experienced a well-deserved upswing, and the impact on resource prices from the Ukraine war subsided. ESG fundamentals also came into focus, with investors increasingly looking for specialist knowledge in areas such as healthcare, IT, and utilities and renewables.

In addition, market inefficiencies in the ESG space began to attract attention. As ESG-focused funds are often benchmark unaware, markets weren’t pricing in the true value of these ESG-aligned companies, leading to opportunities for patient capital investors who were willing to take a long-term view.

Finally, the sustainable universe began to show its potential. Favourable structural trends, such as the transition to a low-carbon economy, are creating new investment opportunities in areas such as renewable energy and sustainable infrastructure. These trends are likely to continue to drive growth in the ESG space in the years to come.

Our financial planning specialists offer a no-obligation, free consultation to assess your situation and guide you through what type of loan you need.

To schedule a quick 15-minute phone call with our Financial Planners, please click here. Alternatively, you can also contact us on 1300 726 082 or visit https://thehopkinsgroup.com.au/contact/

Wealth Adviser Debt vs Equity Summit

The Wealth Adviser Debt Versus Equity Summit 2023 held last 18 July 2023 brought together a panel of experts from the financial advisory and financial planning industry markets to discuss the latest trends and opportunities.

The Summit was hosted by Keith Cullen, Managing Director of WT Financial Group Limited, and our Group’s Managing Director, Michael Williams, was invited as part of the expert panel to explain The Hopkins Group’s successful growth model through strategic equity swap and merger.

Michael explained that equity, unless debt, foster a relationship that is deeply invested by both parties, and thus creating a context where all parties involved has the interest of the Group at the forefront, and not just personal gain.

To watch the full Summit online:

If you are a financial advisor looking to expand or grow, our THG Financial Adviser Partnership Program might be something worth you while to consider.

By partnering with us, you and your clients will have access to the group’s end-to-end, holistic service suite across financial planning, estate planning, property sales, property management, property advocacy, tax & accounting (business & personal) and mortgage & finance.

For more information about our partnership program, please visit: https://thehopkinsgroup.com.au/l/financial-advisor-partnership-program/ or click https://thehopkinsgroup.com.au/app/uploads/2022/12/Financial-Advisory-Partnership-Program_One-Pager-1.pdf for the program fact sheet.

Alternatively, you can book in a confidential, obligation-free appointment via the link below:

https://outlook.office365.com/owa/calendar/BookaPrivateandConfidentialChat@thehopkinsgroup.com.au/bookings/

Victorian Budget 2023 impacts

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The Victorian state budget for 2023-2024 has both positive and negative measures for taxpayers. It is also geared towards helping the government repay its COVID-19 debt, and as a result, measurements are made, and they have a significant impact on several industries and financial plan holders.

In this article, we will outline the major measurements made, their impact to different key Australian demographics and their impact:

Family Homeowners – Generally Positive

The budget includes positive measures for family homeowners and first home buyers. There will be a new first homebuyer grant program with a $250 million investment, making it easier for you to buy your first home. Additionally, a $100 million investment in a home renovation grant program will support home improvements.

However, there is a temporary increase in stamp duty on residential property purchases over $1 million, which may have a negative impact on family homeowners or those with a single mortgage. This increase in costs should be considered when planning your repayment budget.

 

Small Business Owners – Generally Positive

For small business owners, the budget has mixed implications. On one hand, there are investments in new resources and support, such as a $50 million small business accelerator program and a $10 million small business grants program.

On the other hand, changes to WorkCover means further increased operational costs.

 

Older Victorians – Positive

The budget aims to improve the quality of life for older Victorians with a $250 million investment in an aged care reform package and a $100 million investment in a seniors’ transport program. These measures should positively impact your quality of life as an older individual.

 

High-Income Earners – Generally Negative

High-income earners may experience negative effects due to increased taxes. A temporary payroll tax surcharge of 0.5% for businesses with national payrolls over $10 million and a temporary increase in stamp duty on residential property purchases over $1 million will increase their tax burden.

The temporary increase in stamp duty on residential property purchase over $1 million dollars also negatively impacts higher incoming earners looking to purchase a home in the near future.

However, the payroll tax-free threshold will be raised from $700,000 to $900,000 from July 1, 2024, providing some relief for high-income earners.

 

Property Investors – Negative

Property investors may face challenges with the budget’s measures. The temporary increase in stamp duty on residential property purchases over $1 million and the lowering of land tax threshold from $300,000 to $50,00 will significantly increase the cost of maintaining a property.

 

What Should I Do Next?

If you are concerned about how the budget may affect you or to explore how to mitigate the impact of the budget has already affected you, please do not hesitate to contact your financial advisor.

We can help you understand the budget’s impact and discuss your options to protect, secure and ensure the long-term growth of your wealth.

To book your online or face-to-face no-obligation consultation, please click this link.

If you are a client of The Hopkins Group, we encourage you to speak to your THG financial advisor directly. To book a meeting with your THG adviser, please click the link.