What’s in a Name?

Everyone uses labels. They provide us with a simple way to make sense of the world around us.  Sometimes they can mean a lot, but they rarely tell the whole story, so it can pay to dig a little deeper. Because when it comes to retirement income its income, growth, and confidence that matters.  

Why do people invest?  Because they love shares – or because they are seeking growth? Because they love bonds – or because they need income?  Because they love property – or because they are seeking both income and growth?

For many investors approaching or entering retirement, a keen focus on investing emerges. After careful time spent building wealth over a lifetime, attention often shifts and some pertinent questions emerge: Will my income be enough to live in retirement? Will I have ready access to capital should I need it? Will my capital base last through a long and happy retirement? All of a sudden, the label is less important and the outcome takes centre stage.

Look beyond the label

Markets will evolve, and with that evolution products will be regularly reviewed, reclassified and reassessed. La Trobe Financial is a prime example. When we launched our retail asset management in 1989, the current lexicon of ‘private credit’ didn’t exist. At various times, we have been called various things, by various people: mortgages, credit, debt, alternatives, income, fixed income, private debt, and most recently private credit.

Call us what you want, just don’t call us late for dinner

All the while, our philosophy has remained the same: that a diversified portfolio of quality assets, carefully selected, conservatively and transparently managed, is well positioned to perform across the economic cycle. 

While labels have come and gone, our underlying philosophy has remained unchanged. Over that period, we have grown and now support over 130,000 investors^ and portfolios of over 5,000 financial advisers, helping grow total assets under management to almost $25 billion. In the last financial year alone, we distributed circa $900 million across our investor base. That’s a real, tangible, and genuine contribution to Australia’s wealth industry, and a label we are willing to accept!

The Missing Middle goes by many labels

We recently wrote to the market about the ‘Missing Middle’. In the article, we explored how an investment portfolio focussed on just cash, bonds, and shares may be missing out on benefits of exposures to assets which may smooth returns and improve investor outcomes.

We encourage you to view the article here.

Broad labels can encourage broad assumptions. When assessing an investment, conversation should be less about its label, and more about its contribution. The best portfolio decisions are rarely made by looking at an investment’s label alone:

• Does it improve your investment portfolio with diversification?
• Does it add to your income generation?
• Does it improve the stability of your returns?
• Does it add to the longevity of your capital?
• How much of my wealth ought I allocate to this individual investment?

These are questions worthy of consideration. The Missing Middle is the portfolio concept that removing labels and looking at outcomes is a part of conservative portfolio construction. Maintaining myopic exposures across shares, bonds and cash because these are labels you know, is potentially ignoring an enormous universe of opportunities which might lift your investment experience over the years ahead.

Transparency matters

A word everyone should keep coming back to is transparency. Whatever the label of your preferred investment, it should never be made blindly. That’s why La Trobe Financial offers transparency through our monthly portfolio reporting, available here, with thousands of datapoints to give you a clearer view on how our portfolios are constructed, and what is driving them at that moment in time. It’s also why we offer regular updates, webinars, and face-to-face events across the country and it’s a commitment we made years ago.

We encourage your engagement

In an era of chatbots and call-menus, another differentiating point is that we actively encourage you to call us to ask any questions you have. As you look beyond the label and have any questions, feel free to contact our local Investor Centre, Institutional & Private Client team, or Business Development Managers. We are on call to help wherever we can on 1800 818 818.  Or simply visit our website or investment portal, La Trobe Direct.