At the Private Wealth Network’s Investment Insights conference in Sydney last week, Dr Philip Lowe, former Governor of the Reserve Bank of Australia, explained his rationale for assuming the Chair of Future Generation Australia (ASX:FGX), highlighting the company’s investment and social returns. He pointed out that Future Generation Australia (ASX:FGX) has provided investors with a 1% higher average return than the ASX 20 (with lower risk), while donating 1% per cent of its assets annually to Australian non-profits focused on children and youth at risk. To date, Future Generation has donated $87.2 million to charity.
Turning to the economy, Dr Lowe warned that Australia’s strong economic performance over the past 35 years is in danger of being derailed by declining demographic dividends, peaking commodity prices and stagnant productivity growth, which has led to 6-7% loss in real income. He highlighted the potential of technological advances, such as artificial intelligence (AI), and tax reform to drive future productivity growth, but conceded that politicians were unlikely to make the tough calls on tax that are required.
Dr Lowe also discussed the potential economic impact of the US election, warning that Trump could increase tariffs, resulting in a trade war that would have a negative impact on global trade and Australian exports. Another threat was the United States’ lack of fiscal discipline. He said that both Presidential candidates had outlined programs that would increase the country’s already huge budget deficit. While financial markets have so far turned a blind eye to the US debt pile, Dr Lowe warned that they could not ignore it forever.
Future Generation Australia (ASX: FGX) and Future Generation Global (ASX:FGG) offer you access to leading Australian and boutique fund managers (including the likes of David Paradice, Peter Cooper and Phil King) on a no-fee basis. By waiving all management and performance fees, these fund managers enable a 1% donation to Australian non-profits working to support children at risk (in the case of FGX) or to prevent mental ill-health and promote wellbeing in young Australians (ASX:FGG).
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