How Tesla and Apple impact your super balance
Despite the Coronavirus pandemic, and the associated global recession, 2020 has proven a bumper year for Tesla. The company’s share price has more than doubled in the last six months, reaching just over $1000 US per share in June.
There’s a good chance your super balance benefited from that remarkable run. At Catholic Super we invest in the world’s leading tech stocks on our members’ behalf, including Tesla. Which means you may own a small piece of the company if you’re invested in our overseas shares option or growth driven diversified options.
Tesla may be the highlight, but we hold significant technology investments on our members behalf, and their collective 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.
FANGs versus 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 Alibaba is among them.
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. It’s 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. It’s 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.
Bigger doesn’t always mean better
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.
What does all that mean for our members? And how does it impact your retirement?
Making the most of opportunities
Our fund managers are tasked with investing members' money, and ensuring we make the most of opportunities whilst also being mindful of the 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, Netflix subscriptions, and Tesla shares have more to do with your future retirement balance than you may realise.
Personally tailored investment options
Choose an investment option that's right for you.
Any figures quoted are correct at the time of writing but may be subject to change.
Authorised by Togethr Trustees Pty Ltd (ABN 64 006 964 049; AFSL 246383) ('Trustee') the trustee of the Equipsuper Superannuation Fund (ABN 33 813 823 017). Catholic Super is a division of the Equipsuper Superannuation Fund (ABN 33 813 823 017). Financial advice services may be provided to members by the trustee's related entity.
Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). The information contained herein is general information only. It has been prepared without taking into account your personal investment objectives, financial situation, or needs. It is not intended to be, and should not be, construed in any way as investment, legal or financial advice. Please consider your personal position, objectives, and requirements before taking any action. Past performance is not a reliable indicator of future performance.
© 2020 Togethr Trustees Pty Ltd. For further information please our contact our Service Centre on 1300 655 002 or visit our website: csf.com.au.