Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Morningstar runs the numbers

Lex Hall  |  24 Aug 2020Text size  Decrease  Increase  |  
Email to Friend

We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended 21 August.

US$2 trillion

Apple has become the first listed company to reach a valuation of US$2 trillion ($2.8 trillion). But this milestone also serves to remind us that there is more to the US stock market than Google, Facebook and Amazon, says Morningstar’s James Gard. He spoke to several fund managers who cite other interesting sectors and stocks. Among them are medtech companies such as California-based Edwards Lifesciences, which makes artificial heart valves. Then there’s medical testing firm Thermo Fisher Scientific and UnitedHealth Group, which offers a one-stop-shop including insurance and analytics.

$30 trillion

Bank of America strategists now predict the ETF market will hit $30 trillion in assets under management by 2030, says Sharesight CEO Doug Morris. That’s on par with the GDP of the entire US economy. That’s up from $5 trillion when they first launched in 1993. “Looking at our own data on ETF popularity from over 100,000 DIY investors and financial professionals who track their portfolio and investment performance with Sharesight, 36 per cent of self-managed super fund users bought or sold an ETF in 2019, a significant increase on a figure of only 5 per cent in 2009.”

33 per cent

The maximum tax rate the government should impose if we’re to get consumption moving, says Morningstar’s head of equity research Peter Warnes. “The opportunity to make a meaningful difference is clear,” says Warnes. “These opportunities rarely present, and bold steps are required. Personal tax rates above $37,001 need to be slashed meaningfully, by at least 25 per cent to a maximum rate of 33 per cent. As a partial offset some benefits trimmed. An increase in the GST should be considered. A sharp knife also needs to be taken to some government expenditure.

15 per cent

The amount of cash Magellan’s Hamish Douglass is sitting on. “Since the middle of March, we've been cautious, running at around 15 per cent cash,” Douglass says in Firstlinks. “We really do not know what's coming in the next 12 months or so. I haven't got a crystal ball that's going to tell me when we get to a vaccine. If it's rolled out through 2021 with all this fiscal support and monetary support, that should support markets grinding higher. But if we don't get to a vaccine in a reasonable period of time, and we see a spiking in the latter part of this year in the Northern Hemisphere leading into the winter, and emerging markets come under more stress, we could find ourselves really testing the limits of what central banks can do. The economic scenario could get materially worse than it is today.”

$42 billion

The amount of superannuation Treasury estimates will be withdrawn by the end of the year, writes Graham Hand in Firstlinks. Treasury initially estimated that $29 billion would be withdrawn from super when the early release was announced in response to covid-19. With the scheme now extended until the end of 2020, the estimate has been revised to $42 billion. “Around 2.6 million people have used the scheme, with 620,000 emptying their super accounts completely,” writes Hand. “As of 9 August 2020, according to APRA, this has reached $32 billion with the average payment of $7700 and 97 per cent of applications approved.”

Most popular articles

Top videos

Prem Icon Morningstar's Global Best Ideas list is out now. Morningstar Premium subscribers can view the list here.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

Prem Icon See also Morningstar Guide to International Investing

is senior editor for Morningstar Australia

© 2022 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'regulated financial advice' under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

Email To Friend