Page 8 - FWP Wealth-Adviser-Issue-120 (FWP)

ISSUE 120
SEPTEMBER 2025

and sound investment returns”. Suncorp and QBE delivered superannuation, and speedy adaptation to policy changes.
solid increases in cash flows, even as broader dividends For clients, regular review of asset structures, attention to
across the market declined. cost bases, and coordination between investment and tax
The role of cost management was front and centre across strategies offers a pathway to resilience.
sectors. “Strong cost control or via companies which had Rebalancing in volatile markets, maintaining flexibility,
previously implemented cost-out programs… as a driver and tilting towards sectors with pricing power or margin
of upside,” was a clear message from the earnings season. growth can all add ballast. Dividend sustainability, trans-
Margins, rather than top-line revenues, became the focal parent balance sheets, and management credibility take
point for many firms navigating higher input costs and on increased importance when macro risks are elevated.
global trade uncertainties. On the negative side, resource For those funding their retirement, dividend growth above
companies sensitive to Chinese demand and commodity inflation—achieved by some portfolios in 2025—is critical to
prices, like BHP and Rio Tinto, faced challenges. However, maintaining living standards.
their diversification into green energy materials—copper and
lithium—may cushion future earnings volatility. Conclusion: Maintaining Perspective
and Positioning for the Upswing
Policy, Interest Rates, and Macro Influences “If anything, corporate Australia has emerged through
on Portfolio Strategy an economic soft path in solid shape. If this is the worst
Broader macro themes—including policy shifts and that it gets… then it’s just not that bad”. The 2025 reporting
interest rates—had a tangible impact on investor sentiment season reminds investors of the importance of looking past
and portfolio strategy in 2025. Investors tended to “look a short-term disappointments or excitement and focusing on
little further ahead when… we are in a policy rate cut cycle,” the direction of economic travel. “Looking ahead, inves-
seeking to front-run inflection points in economic condi- tors should be positioned to take advantage of a cyclical
tions. The RBA’s decision to lower the cash rate to 3.6% in upswing” as economic and policy conditions gradually
August provided a tailwind for equities and supported a improve. The best outcomes will come to those who stay
cautious optimism for forward returns. disciplined, adopt resilient portfolio structures, and contin-
Labour market dynamics and global developments—such ue to assess opportunities in light of unfolding trends.
as China’s uneven recovery and tariff headwinds from the Australian investors are encouraged to work closely with
US—added further complexity. The outlook for domestic their advisers, regularly revisit financial goals, and maintain
cyclicals brightened as the prospect of lower rates hinted at sight of fundamentals amid media distraction. With the
relief for consumer and industrial-facing sectors, but soft market poised for change and policy support on the horizon,
pockets remained, particularly in traditional retailers and a measured approach will help investors not just weather
some property assets. Investors positioned for resilience volatility, but take advantage of tomorrow’s opportunities.
should factor in both macro opportunities and risks, main-
taining diversified exposures and remaining alert to rapid
policy changes. References
ASX reporting season: Room for optimism – Jun Bei Liu,
Practical Wealth Strategies Firstlinks, 26 August 2025.
—Managing Tax, Dividends, and Asset Resilience Key themes shaping this ASX reporting season – Sodali,
Beyond broad themes, the reporting season reinforced 12 August 2025.
the importance of practical wealth strategies for Australian Key Themes from the February 2025 Reporting Season –
investors. Income focus remained critical, with many Allied Wealth, 18 March 2025.
portfolios using a “new scorecard [to] help income-focused ASX reporting season wrap: Solid earnings, dividend sur-
portfolios” evaluate the sustainability of dividends in light prises and a domestic revival – Market Index, 1 September
of recent cuts and increases. Dividends declined by -6% in 2025.
February among many large caps, but selective stocks post- August 2025 Reporting Season Outlook – Bell Direct, 24
ed increases, with evidence that “our investor’s dividends August 2025.
will be +6% greater than the previous period in 2024” within Legal Tax Minimisation: How Australia’s Wealthy Build
some diversified portfolios. Assets in 2025 – Hudson Financial Planning, 12 July 2025.
Legal tax minimisation remains front-of-mind Buy Hold Sell: Reporting season winners, losers and 2
for Australia’s wealthier households. The “Legal Tax ASX stocks to watch – Livewire Markets, 31 August 2025.
Minimisation: How Australia’s Wealthy Build Assets Cliff Notes: Labour market resilience critical to the
in 2025” framework highlights smart use of trusts, outlook – Westpac IQ, 19 June 2025.

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