Australian banks still worthy of a place in most portfolios… despite what some commentators say
By Tim Farrelly – CEO of Farrelly’s, and asset allocation consultant to Australian Unity Personal Financial Services
Barring disasters, the banks should produce returns of the order of 10% per annum over the next decade. With a yield of 8% including franking credits, we need just 2% per annum growth to get us to a 10% per annum total return. Even if we get no growth in earnings, an 8% per annum return means that banks will be worth a place in most portfolios – barring disasters.
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