Investment options for your capital

Holding property assets, whether residential or commercial, has long been an attractive investment choice. Property is tangible and familiar; it offers the potential for capital growth, income and tax effectiveness. Plus, for many business owners, property assets provide the premises that the business trades from.  

Yet for a range of reasons – market conditions, tax, overexposure, regulations, or a need for greater liquidity – you may be selling down your residential or commercial property investment portfolio or downsizing your home.

Imagine an example of Jing, a successful property developer. Jing had built a thriving business specialising in residential real estate projects. Over time, she also invested her personal wealth into a large New Zealand residential property portfolio.

As her wealth grew, Jing became increasingly concerned that both her business exposure and her personal capital were tied to the fortunes of one asset class – residential New Zealand property. Jing sought advice from ANZ Private to find a more diversified solution for her personal capital.

To mitigate Jing’s concentration risk, ANZ Private diversified a portion of her personal wealth across a strategic portfolio of New Zealand and international shares, bonds, infrastructure and private markets.

Jing’s investment portfolio was tailored to her long-term financial objectives and, in concert with her remaining property portfolio, gave her much greater financial security.

The advice Jing received from ANZ Private enabled her to concentrate on expanding her property development business, confident that her personal financial future was being expertly managed.

When investing, it’s important to take a whole-of-portfolio perspective that comprehensively considers all your investment and risk exposures, including your business exposures.

A successful whole-of-portfolio approach will see your available cash invested to improve the performance potential of your total portfolio, help mitigate your portfolio risk and consider your overall financial objectives.

At ANZ Private, we invest the time to understand your exposures, your risk appetite and your financial objectives. We can then customise an investment strategy based on your needs.

Tailored investment strategies typically invest in diverse asset classes with different risk and return drivers. This is because assets tend to have distinct cycles, responding to macro factors differently. If there’s a downturn in one industry, country or asset, your portfolio is cushioned by other investments experiencing different conditions.

Investment assets can also react differently to identical market conditions. Over the past decade, annual returns for various asset classes have fluctuated, with some performing exceptionally well in one year and then experiencing declines or negative returns in the next. These cycles highlight the dynamic nature of financial markets, demonstrating that strong returns in each period do not guarantee continued success in subsequent years. 

At ANZ Private, we understand how different asset classes behave during market cycles and can actively manage our clients’ portfolios through different market conditions during an investment cycle, including downturns. Our ongoing, risk-aware portfolio management process can help to smooth out your overall return.

Another factor to consider when investing your cash proceeds is the importance of liquidity – that is, the ability to quickly convert your investments into cash. When you invest in assets listed and traded on public exchanges, you’re able to quickly meet any unexpected financial needs.

What’s more, liquid markets tend to be more efficient, meaning that asset prices reflect available information and may be less prone to manipulation. Also, the ability to actively trade investments means that market inefficiencies can be exploited.