October Newsletter
In this edition:
Migration from BT Wrap to BT Panorama
Logistical Pain of a COVID Vaccine
CommSec State of the States
The Pandemic of Little to No Interest
Meetings Virtually a Permanent Change
The President of the Pandemic
6-Member SMSF Bill Introduced to Parliament
Migration from BT Wrap to BT Panorama
BT Wrap is preparing for a move to their new platform, BT Panorama.
In early 2021, all existing BT Wrap accounts will migrate across to BT Panorama. There will not be any change to your fees or existing investment portfolio.
Panorama offers an online portal and a mobile app. One of the most significant improvements from your existing Wrap account is that BT Panorama offers Pay Anyone and BPAY functionality, so you can pay bills directly from an investment cash account (not applicable to super accounts).
You can read more on the Investor Support Page, and there will be more detailed communications to come as we approach the migration date.
Logistical Pain of a COVID Vaccine
Here's a question for you: how many jumbo jets would it take to transport a COVID-19 vaccine dose for every one of the 7.8 billion people on the planet?
If you guessed 8000, you'd be right. That is but one of the logistical manoeuvres to consider in the mission to eradicate coronavirus from our lives. Three key challenges loom: making enough doses to go around; storing and distributing them; and the business of actually jabbing people.
"Even if we get a safe and effective vaccine there's going to be challenges beyond the finish line," T Rowe Price analyst Kim Tracey said this week. "The scale we need to vaccinate the world will be enormous,” Tracey says. “We'll need cold-chain facilities and we need to get to every corner of the globe. This is one of the biggest logistics challenges we've ever faced."
Read the full Morningstar article…
CommSec State of the States
How are Australia’s states and territories performing?
Each quarter, CommSec attempts to find out by analysing eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.
Tasmania is the best performing state for the 3rd quarter running, while Victoria, New South Wales and Queensland have fallen the most in terms of ranking indicators.
Watch the video or read the full report at https://www.commsec.com.au/stateofstates
The Pandemic of Negative Interest Rates
The idea of giving someone money and paying them for the privilege of holding it probably strikes most people as odd. However, with several central banks already implementing a negative rate policy and 34% of global government bonds outstanding trading at subzero yields (see Figure 2 below), it’s now a well-established feature of global financial markets.
Recently, both the Bank of England and the Reserve Bank of New Zealand have signalled their intention of joining the negative rate club, sending both government bond markets into negative yielding territory in anticipation. Although the RBA has pushed back on taking the cash rate negative, it’s no longer a far-fetched scenario. Investors should be prepared for the possibility.
Virtual Meetings and Electronic Documents to Become Permanent
Treasury has released for consultation an Exposure Draft of the Corporations Amendment (virtual meetings and electronic communications) Bill 2020 which amends the Corporations Act to make permanent the temporary COVID-19 relief, which allows companies to hold meetings virtually, send meeting-related materials electronically and validly execute documents electronically.
If passed, the Bill allows electronic means or alternative technologies to be used to:
execute company documents;
hold meetings of directors of a company, meetings of shareholders of a company (including Annual General Meetings) and meetings of members of a registered scheme;
execute documents relating to meetings;
record, keep and provide minutes; and
provide notice of a meeting and give other documents relating to meetings to the prospective attendees.
The Pandemic Presidential Election & Financial Markets
The US Presidential election is on Tuesday 3 November 2020 (Wednesday 4 November 2020 AEDT).
Former US Vice-President Joe Biden leads incumbent US President Donald Trump in opinion polls.
A close election is expected with a contested outcome considered the ‘worst case’ scenario for financial markets. An expected surge in postal voting due to the pandemic, continuing civil unrest and a possible lift in virus infections in colder months ahead of the election could add to uncertainty.
We find that share market corrections and recessions reduce the likelihood of an incumbent President winning a second term in the Oval Office.
Professional investors are buying protection for their portfolios against expected volatility as the equity risk premium builds ahead of the election – which is already the most expensive event risk on record.
Commonwealth Bank Group currency strategists expect a small Aussie dollar reaction if Mr. Biden wins office. But a large fall could be recorded for the Aussie against the greenback should President Trump be returned for a second term.
6-Member SMSF Bill Introduced to Parliament
Senator Jane Hume has introduced Treasury Laws Amendment (Self-Managed Superannuation Funds) Bill 2020 into the Senate this week, which amends the SIS Act, the Corporations Act, ITAA 1997 and Superannuation (Unclaimed Money and Lost Members) Act 1999 to increase the maximum number of allowable members in SMSFs from four to six.
The amendments will apply from the start of the first quarter that commences after the act receives royal assent.
Former Minister for Revenue and Financial Services Kelly O’Dwyer said the change would increase choice and flexibility for members.
The measure to increase the SMSF member limit has previously had mixed opinions, with some experts flagging the potential risks that additional members pose in terms of disputes between members and estate planning.
Other SMSF specialists have pointed out that increasing the number of members in an SMSF could raise the risk of members falling victim to elder abuse.
Other commentators in the SMSF industry have supported the measure as it provides larger families with the option of bringing their children into their fund.
Read the full AccountantsDaily article…