Since 1992 Australians have become familiar with a superannuation system which has not only helped set them up for retirement without government support, but has also spawned an industry catering to and profiting from providing financial services to superannuates.
There are a few companies which are exposed to the growing superannuation industry creating a potentially profitable “double play” for investors who are setting themselves up for a comfortable retirement through a self-managed super fund (SMSF).
AMP Limited (ASX: AMP) – Although AMP has rallied nearly 23% this calendar year the return over the past 12 months is still less than the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO). This underperformance arguably represents an opportunity for long-term investors. With one of the largest funds management businesses and financial advice networks in the country, AMP offers investors significant exposure to the growing superannuation industry.
Macquarie Group Ltd (ASX: MQG) – The investment bank operates very large funds management, stockbroking and private wealth divisions. With a business model that is tapped into much of corporate Australia its earnings are likely to grow with the national and global economies.
Platinum Asset Management Limited (ASX: PTM) – Platinum has a superb track record and importantly is focused on investing internationally. Given the excessive ownership of Australian equities and underinvestment in international equities the growth potential for those focussed on foreign equity markets is exciting. With Platinum’s record and ability to manage significantly higher levels of funds, the growth outlook for the business is strong.
IOOF Holdings Limited (ASX: IFL) is in many ways a smaller version of AMP minus the insurance business. Like AMP the company has a large financial advisor network – a network that is set to get even bigger if the merger with SFG AUST FPO (ASX: SFW) successfully concludes. It also offers a number of services including funds management, financial planning and trustee services.
5 stocks under $5
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*Extreme Opportunities returns as of June 5th 2020
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