ADVERTORIAL
low interest rates Interest rates in Australia have reached all-time lows. What does this mean for you?
Why do interest rates go up and down? Is this a good thing or a bad thing? While these can appear to be difficult questions, the answers are simpler
It is cheaper for businesses to borrow money and invest in economic growth. This may have a positive effect on the value of bonds and the stock market.
than you’d think. Interest rates are adjusted to help create healthy and sustainable economic development. In the
Your HESTA investment option may hold bonds and stocks. Can there be a downside to low interest rates?
same way you adjust your driving speed to match the road conditions, interest rates are adjusted to
Yes. Lower interest rates mean money held at the bank or invested in cash products (such as a term
help the economy operate smoothly through the current environment.
deposits) will generate lower performance. Your HESTA investment option may hold cash and term
In Australia, interest rates are currently at record lows to help support the COVID-19 recovery. Let’s take a look at how low-interest rates affect
deposits.
superannuation investments. Let’s take a look at some of the exciting projects currently in Brandon Capital’s portfolio (and your portfolio with HESTA).
WHAT DOES THIS MEAN FOR MY INVESTMENTS WITH HESTA? HESTA has a range of investment options. Each option holds a different blend of assets. These assets include Australian shares (e.g. Telstra), international shares (e.g. Apple), cash (e.g. ANZ
ARE LOW INTEREST RATES GOOD OR BAD FOR ME?
Term Deposits), etc. When interest rates are low, the cash asset
Is there an upside to low interest rates? Yes. It lowers the cost of debt. It becomes cheaper to
component in your HESTA investment option will generate a lower return. In Australia, interest
repay debt (such as personal loans and mortgages).
rates are already at record lows. It is possible
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The Health Advocate • AUGUST 2021
