How iPhone sales impact your super and retirement
Investments | 25/06/2020 |
7 min read
2018 and 2020 have been big years for Apple. In 2018, the tech company became the world’s first company to reach US$1 trillion in market value. Then in June of 2020, Apple hit a new benchmark, with shares reaching $331, putting the company within reach of a US$1.5 trillion valuation.
There’s a good chance you also benefitted from Apple’s remarkable performance. At Equip, we invest in the world’s leading tech stocks on our members’ behalf, including Apple. Which means you may own a tiny fraction of Apple if you’re invested in our overseas shares option or growth driven diversified options.
We hold significant technology investments via the international equities market, and their share price performance has been excellent over recent times. Facebook, Apple, Amazon, Netflix and Google are collectively referred to as ‘FANG’ stocks - (F)acebook, (A)apple / Amazon, (N)etflix, (G)oogle - and have been shaping how we live our everyday lives for several years. In the process (and joined by the fund’s investment in Tesla and Microsoft), they’ve helped drive the strong investment returns for our members.
What about the BATs?
While Apple and other FANGs are US-based, they face stiff competition in the global tech stakes from China’s BATs. (B)aidu, (A)libaba and (T)encent may not be household names in Australia, but they deserve to be on investors’ radars because they are a dominant market force not just in China but increasingly elsewhere else as well.
As our Top Holdings page shows, we are invested in a range of overseas shares, and both Alibaba and Tencent are among our top holdings.
Hong Kong-listed Tencent Holdings is known as China’s equivalent of Facebook. Tencent was the first Asian company to reach the US$500 billion stock market valuation mark. Its WeChat social media platform has over one billion members and it’s also involved in online gaming, music, e-commerce and smartphones.
Alibaba (China’s Amazon plus eBay) is the world’s biggest retailer. Its New York Stock Exchange (NYSE) listing in 2014 was the world’s biggest and this year it became the second Asian company to be valued at more than US$500 billion.
Baidu (China’s Google) is the second most widely used search engine in the world. It’s also moving into mapping, artificial intelligence and autonomous vehicles. And these are just the biggest of many emerging Chinese tech stocks.
Opportunities and challenges
The tech giants are also beginning to expand into new business areas such as cloud storage, music and video streaming. Some are also growing by buying other companies, with Facebook buying WhatsApp and Microsoft buying LinkedIn.
But bigger doesn’t always mean better. Facebook has seen user numbers flat-lining in recent years and has faced public scrutiny about privacy issues. China’s BATs also face challenges from the worsening trade dispute with the US. And everyone is facing challenges around the coronavirus pandemic – with the notable exception of Tesla.
So how can you as an Equip member participate in the dynamic technology sector without getting burnt?
Getting down to business
Diversification is the key to investing in the world’s leading tech stocks, while minimising the risk of individual companies performing poorly.
Our members benefit from the knowledge of our selected fund managers who are there to ensure we make the most of the opportunities in the market whilst being mindful of these risks.
Our overseas shares option has a significant weighting to technology companies. And even our growth driven diversified options have substantial tech stock holdings.
Which means iPhone sales and Netflix subscriptions have more to do with your future retirement balance than you may realise.
You can review and update your investment options by logging into your account and selecting Investments from the drop-down menu.
This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr") is the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("Equip" or "The Fund"). Past performance is not an indication of future performance.
Togethr Financial Planning Pty Ltd (“TFP”) (ABN 84 124 491 078, AFSL 455010), trading as Equip Financial Planning, is licensed to provide financial planning services to retail and wholesale clients. TFP is owned by Togethr Holdings Pty Ltd (ABN 11 604 515 791). You can obtain the TFP Financial Services Guide and/or Privacy Statement by contacting our Helpline on 1800 682 626. This is general information only and does not take into account your personal objectives, financial situation or needs and therefore should not be taken as personal advice.