Year in Review 2020


Company update
Team update
Lending Year in Review

2020 saw us, like many Australians, bunker down, stick together and really focus on being there for the people that are near and dear to us. We had a lot phone conversations and thousands of Zoom meetings this year to stay in touch with our valued clients. With you, we rode through the challenges of volatile investment markets (where our portfolios held up really well, but more on that later) and mandatory lock downs, then onto uncertainty about what a recovery might look like before some optimism about ongoing government support, vaccines and a really strong share market rally.

We are proudly helping more than 900 households with their financial needs.  We are grateful to have added a number of new clients this year and we look forward to continuing our growth in 2021. If you sense that any family members, friends, or colleagues are at all unsettled with all this volatility, we’d be happy to have a chat with them – just to make sure they’re invested properly and to offer our support.

Our advisers completed a lot of study this year, passing graduate diploma subjects ranging from Ethics and Professionalism to Commercial Law and Taxation Law. We’re particularly pleased to announce that all of our advisers have now passed the mandatory Financial Adviser Standards and Ethics Authority (FASEA) competence exam a full 12 months before it is required and before more than 50% of Australia’s advisers.

We’ve also grown our support this year through the addition of Jenny and Erykah to the team. And the Evalesco family has grown too, with the very exciting arrival of two more Evalesco babies, in Mel’s daughter Kiana and Matt’s daughter Ivy.

During 2020 we celebrated significant milestones for team members, with both Kathryn and Hung notching up 5 years with Evalesco. A very special mention must go to Kristi who has been an incredible contributor to team Evalesco for 10 years.

Thank you for continuing to entrust us to be your advice partner. We wish you a relaxing and fun festive season and a healthy, wealthy and happy 2021.

Lending Year in Review 

2020 has seen us help more clients with their lending needs than ever before.

During this period of uncertainty, our team has been actively involved in helping our clients save money in their budgets through reducing interest and fees on their loans by renegotiating with their existing lenders or refinancing to take advantage of the record low interest rates we’ve seen this year.

Along with their lower interest rates, some clever structuring of our clients’ savings using dedicated offset accounts, has helped save further interest costs, while helping to align their spending to their budget and their savings to the goals that matter.

Applying debt-recycling strategies to reduce our client’s non-deductible ‘bad’ debt, while using their available equity to invest, has helped many of our clients reduce their tax bills as well.

For those clients who were stood down from work, not only were we actively seeking lower rates and fees from their lenders, but we were also able to help with repayment pauses or restructuring their debts to lower their repayments.

We have been able to increase our focus on helping clients with their lending needs with the support of Kristi who was promoted into the role of full time Lending Associate at the start of the year.

Although it has been a year of challenges, 2020 has also been a year of opportunity, with many clients saving more than ever and reducing debt, while investing to take advantage of the strong market returns we’ve seen since late March.

We’re confident we can help even more clients in 2021 get ahead financially and we’re looking forward to celebrating in their success.

Investment Year in Review

2020 has been an interesting and challenging year.  While we can talk about bush fires, COVID-19, Australian State and United States elections, the real story is the impact of a rapidly changing world on the various generations and how that will play out in the coming years.

Arguably, the COVID-19 year has been similar to living through a global conflict and for many under 45, it was definitely a new experience. As with all such experiences, it can be confronting, and challenging in terms of our health and well-being, and it remains to be seen as to whether there will be far reaching financial impacts. This was certainly true of COVID-19, and uncertainty was all around. When markets started to move in February, it felt that we were being pressed on all sides.

I would like to digress for a moment, and ask you to consider the words of Rocky Balboa from the film Rocky Balboa (2006);

“The world ain’t all sunshine and rainbows…you, me, or nobody is gonna hit as hard as life. But it ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward. How much you can take and keep moving forward. That’s how winning is done!”

This is a reminder that when the unexpected happens, there are times when investors might feel as though there is no way out. Towards the end of February, when the sharemarket was a sea of red, rest assured, those of us at team Evalesco and the members of the Investment Committee were very focused on protecting what you have accumulated over a lifetime of investing. With that in mind, I wanted to share some of the actions undertaken that our internal attribution analysis has demonstrated were particularly impactful over the last twelve months. Our role with the support and guidance of the Investment Committee, is to ensure that if and when you do get hit, you keep moving forward. These are some of the actions that we believe have led to some very positive outcomes in 2020;

Adhering to our philosophy of reweighting AAN models back to their strategic benchmarks each quarter.
Rotating out of several managers and funds over the course of the year with a view to reducing risk or portfolio costs.
Hedging half of the currency exposure in the AAN Core and AAN Growth Models in the March reweight when the AUD was trading at a little over 55 cents.

From an Australian viewpoint:

Domestic borders are down (hopefully SA reopens soon) and our most populous states are now on the move.
450,000 fewer businesses and almost 2 million fewer employees were on Jobkeeper in October than in September.
We have 56 active cases in the whole of Australia and 90%+ of those are in hotel quarantine as returning travellers. Weirdly enough Qld and WA have more active cases than NSW and Victoria. (1)
Australians are travelling domestically again and tourist destinations are seeing high demand.
Our economy is well out of recession. The September recovery was very healthy after the June figures and arguably better than most expected given the issues in Victoria.
Dire predictions about unemployment have not materialised and is some cases, specifically rural areas, there are shortages.
The property slump was short and sharp but is now recovering and advancing quickly. (2)

Year to date numbers (as at 29 Nov 2020) for the capitals: Sydney +3.9%, Melbourne -0.6%, Brisbane/Gold Coast +4.1%, Adelaide +4.7%, Perth 0.8%
Real estate brokers we are talking to, talk about properties selling well above reserves and the rental market being very tight.

The Australian ASX 200 to 2nd Dec 2020 over the twelve months was slightly down (1.5%) despite the 35% drop in February.
The US S&P500 is up 18% for the year to Dec 2nd 2020, UK FTSE was down 9.7%, German Dax was up 1.3%, S&P Europe 350 was down 2.8%.
The massive amount of government stimulus has seen household net income rise through the year.
We are also seeing very positive news on the vaccine front.

There are some headwinds though.

Trade uncertainty with China, our biggest trading partner.
This pandemic is far from over and international borders are likely to remain firmly shut for some period to come.  Daily death rates continue to climb, though thankfully at a lower rate relative to number of cases.
Even with several vaccines, it will take time to work through society and care and health workers as well as the elderly need to be at the front of the queue.
Fiscal debt around the world looks alarming with over $69 trillion of public debt accumulated. This may not seem to have an immediate impact but reduces what countries can do into the future and leaves us very exposed if we were to be confronted with another unexpected issue. (3)
Potential conflict in the South China Sea.
Disruption of supply chains.

It is quite likely that 2021 will be a little unsettled, and it is our expectation that we will still continue to find everything a little bit harder than it used to be. The economy that is currently awash with cash will find that extra cash has dried up, retail spending will decline, and as the stimulus is rolled back we may well see some companies facing insolvency.

The Chinese trade conflicts are unlikely to be resolved in the short term so our exporters will need to find alternative markets, whilst on the upside for those of you that are wine drinkers, Penfold’s may get cheaper.

As always, should you have any questions about this content, or your own portfolio, please do reach out to your adviser, or drop me an email care of






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