Economic Update – “FY 2022 Investment Perspective”

Last month we spoke about the economic dislocations that were being experienced globally. These issues included supply chain issues and labour shortages that we expect to dissipate in the latter parts of 2021.  Inflationary pressures are building, and we are seeing more evidence of it, but more economists seem to be of the belief that current inflationary pressures will be temporary, central banks are also maintaining their stance that current inflation is merely transitionary. As we work though these economic dislocations, we will see a normalisation of consumer behaviour. Combined with the significant government fiscal stimulus we should see economies run hot and hopefully cause wages to rise. This will be inflationary and will be the trigger for central banks to change their policy footing.  

Looking back over FY21 we are very pleased with the performance of the Royston Capital model portfolios. Model portfolio returns for the period before fees and brokerage included, Core Australian Equities: 36.22%, Self-Funding Instalments: 42.61%, International Equities: 21.78%, Interest-Bearing Securities: 5.59%, and ARIF: 22.93%. We were very pleased with the investment returns. As any savvy investor would know, now is the time to ‘bank’ those returns as it is rare to have such stellar returns to repeat year-on-year. We will certainly be looking to do our best and are already seeking to re-position portfolios to capitalise on our investment views. So, what does FY22 look like from an investment perspective?

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