Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6511
    -0.0007 (-0.11%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • Bitcoin AUD

    107,963.12
    -78.59 (-0.07%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6038
    +0.0004 (+0.06%)
     
  • AUD/NZD

    1.0905
    +0.0003 (+0.02%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     

5 investment trends to watch post-Budget

Josh Frydenberg and vaccines being made
The 2022 Budget supported a couple of key investment thematics worth considering. (Source: Getty)

Government budgets don’t shift markets like they used to but according to investing experts, some areas of spending outlined in the Federal Budget mirrored existing megatrends worth watching.

BetaShares chief economist David Bassanese said the Budget contained a lot of small policy changes that “aren’t going to shift the needle much on any overall sector exposure”.

”You can't say that what they've announced in the Budget is going to put a rocket under any particular sectors to jump on board, but it's more of an acknowledgement of pre-existing trends,” he said.

ADVERTISEMENT

For retail investors, the Budget backed up a couple of key investment thematics worth investigating.

1. ‘Straya

Michael McCarthy, chief strategy officer of Tiger Brokers, said the markets had been responding to what he described as a “pretty good budget for the Australian economy”.

He said the Government had delivered “a responsible budget”: one that responded to the needs of people struggling in the wake of COVID, but also didn’t commit the Government to those measures well into the future.

“And I think it's one of the reasons why we're seeing a positive reaction in the share market,” he said.

Bassanese also said Australian markets had shown “pretty good resilience” in the first quarter despite a rocky start to the year for global markets due to the Ukraine conflict, the pandemic and other factors.

He said the Budget was consistent with Australia’s growth outlook and potential to outperform global markets, noting that the Reserve Bank of Australia was tipped to raise interest rates less aggressively than the US Federal Reserve.

As such, increasing exposure to local stocks, such as through Australian equity ETFs, could be worth considering.

2. Consumer discretionary

As a pre-election budget, the Morrison Government didn’t hold back on its spending.

Bassanese said the cuts to the fuel excise, the payment to pensioners and an extensive low-income tax offset would support the pre-existing rosy outlook for consumer spending.

He said this fortified the case for exposure to the consumer discretionary sector, which is characterised by non-essential consumer goods.

3. Health

The Government also earmarked some interesting health spending, including for local manufacturing facilities to make vaccines.

Bassanese said the spending supported the health sector’s upwards trend triggered by an ageing population and rising incomes.

He said BetaShares had recently launched a new ETF to capture companies at the forefront of technological innovation within the healthcare sector.

Called the Digital Health and Telemedicine ETF, Bassanese said the investment product tapped into a “trend within a trend”.

4. Cyber security

The Federal Government also poured cash into cyber security - the new face of modern warfare - including $9.9 billion over 10 years towards bolstering the nation’s cyber warfare capabilities.

The Government will also offer tax deductions for small businesses investing in cybersecurity.

Bassanese said the Government spending served as another example of accelerating spending on cyber security by governments and the private sector around the world.

There are several cyber security ETF products out there for investors interested in this megatrend.

5. Cloud computing

The Government also doesn’t want Australian businesses to get left behind on digital transformation.

Policy changes in the 2022 Budget include offering tax breaks for small businesses investing in cloud computing and e-invoicing.

There are plenty of ETFs out there for investors interested in diversified exposure to the cloud-computing theme.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.