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UNITED STATES OF AMERICA

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AURA IN USA

Take an approach to your wealth that works for you and your entire financial life. Whether you’re pursuing retirement, making an investment or forging a legacy, understanding the bigger picture is the first step to helping you pursue your financial goals today, tomorrow and for generations to come.

 

Aura Way is a framework to help you have confidence in your future—because you know the money that you’ve set aside for every stage of your life. Aura Wealth Way is an approach incorporating Liquidity. Longevity.

 

Legacy. strategies that Aura Solution Company Limited. and our Financial Advisors can use to assist clients in exploring and pursuing their wealth management needs and goals over different time frames. This approach is not a promise or guarantee that wealth, or any financial results, can or will be achieved. All investments involve the risk of loss, including the risk of loss of the entire investment. Time frames may vary. Strategies are subject to individual client goals, objectives and suitability.

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$5.17     

Trillion Assets Under Management 

$3.8         

63

Trillion Assets Under Custody and / or administration

Countrys

Aura Solution Company Limited is an investments company. We provide investment management, investment services, Paymaster Services and wealth management that help institutions and individuals succeed in markets all over the world.

 

 

All figures as of March 31, 2021 

FACT SHEET

CORPORATE PROFILE

Aura investor day

 

Aura INVESTMENT STEWARDSHIP

 

12 USA POLICY ACTION 
 

BUSINESS EDITION

The year that brought us a global pandemic—and all the health care, social, political, and economic challenges tethered to it—tested the resilience of retirement plans and the trust participants placed in them.

Against this background, advisors, plan sponsors, and participants were all keenly sensitive to the historic predicament they were facing. How America Saves 2021 Small Business Edition addresses their responses.

For some, financial well-being was a daunting prospect in 2020. Yet, for our Aura participants, we're pleased to have witnessed an alternative experience, as noted by their steadfast faith in the design of their retirement plans and choice to forgo emotional trading in the face of an unstable market.

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Target-date funds rule

At year-end 2020, nearly all AURA participants were in plans offering target-date funds. Eight in ten participants had all or part of their account invested in target-date funds.

Such investments continue to be the increasingly popular choice among small-business retirement plans. In fact, in 2020, more than half of all contribution dollars were directed to target-date funds.

 

Autoenrollment becomes more appealing

As of December 31, 2020, 16% of AURA plans permitting employee-elective deferrals had adopted automatic enrollment. This represents 37% of AURA plan participants. (Typically, larger plans adopt autoenrollment more frequently than smaller plans.)

 

Autoenrollment can mitigate the impact of demographics, as those who are younger, shorter- tenured, and in a lower-income bracket exhibit a much higher participation rate when autoenrollment is available.

 

More plans come with a safe harbor

Sixty-nine percent of AURA plans with an employer contribution had adopted a safe harbor employer contribution design as of year-end 2020. The most common design was one with a value of 4%—up to the first 5%—of employee contributions (representing 39% of safe harbor plans).

A safe harbor 401(k) plan allows a plan sponsor to automatically pass certain annual tests to ensure compliance with IRS regulations—if specific contribution, vesting, and participant notification requirements are met.*

Target-date funds rule

At year-end 2020, nearly all AURA participants were in plans offering target-date funds. Eight in ten participants had all or part of their account invested in target-date funds.

Such investments continue to be the increasingly popular choice among small-business retirement plans. In fact, in 2020, more than half of all contribution dollars were directed to target-date funds.

 

Autoenrollment becomes more appealing

As of December 31, 2020, 16% of AURA plans permitting employee-elective deferrals had adopted automatic enrollment. This represents 37% of AURA plan participants. (Typically, larger plans adopt autoenrollment more frequently than smaller plans.)

 

Autoenrollment can mitigate the impact of demographics, as those who are younger, shorter- tenured, and in a lower-income bracket exhibit a much higher participation rate when autoenrollment is available.

 

More plans come with a safe harbor

Sixty-nine percent of AURA plans with an employer contribution had adopted a safe harbor employer contribution design as of year-end 2020. The most common design was one with a value of 4%—up to the first 5%—of employee contributions (representing 39% of safe harbor plans).

A safe harbor 401(k) plan allows a plan sponsor to automatically pass certain annual tests to ensure compliance with IRS regulations—if specific contribution, vesting, and participant notification requirements are met.*

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VIGILANTES

In 1994, US President Bill Clinton’s political advisor James Carville famously quipped, “If there was reincarnation…I would like to come back as the bond mar­ket. You can intimidate everybody.” At the time, he was referring to the notion of higher yields forcing fiscal restraint among policymakers.

 

Yet more than 25 years later, the bond market now seems to intimidate markets for precisely the opposite reason—because rates are so low. This month, 10-year US Treasury yields fell as low as 1.25%, forcing equity investors to question their beliefs about the eco­nomic recovery.

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Over the last six months, equities have been driven by a “Roaring 20s” narrative we highlighted here in the April Monthly Letter. This interpretation of the macro environment supported stocks, particularly those exposed to reflation such as energy and financials. But in recent weeks, that narrative has given way to one of “secular stagnation”—low growth, low inflation, and low rates. Stocks have continued to move higher overall, but bonds are rallying, volatility is up, and com­panies most exposed to economic recovery are underperforming those exposed to secular growth.

The drivers of this shift appear to be some combination of several ideas: 1) high rates of inflation may force the Federal Reserve to hike interest rates prematurely, curbing future growth; 2) the effects of the COVID-19 Delta variant might stall the global economic recovery; and 3) policy changes and slowing growth momen­tum could undermine sentiment on China, the world’s biggest driver of economic growth.

In this month’s letter, we update our macro view and address some of the main questions we’re getting from investors in light of this shift in narrative. In short, we do not believe that the “secular stagnation” narrative is supported by the underlying data at this time. We are staying positive on risky assets, expect yields to move higher by year-end, and continue to advocate positioning for reopening and recovery. In equities we prefer Japan, emerging markets, financials, and energy. Given our view on rates we move our view on EURUSD to neutral.

Fears about inflation are unlikely to recede for several months. This can drive volatil­ity, even if we are right about our view of the medium-term outlook. Accordingly, we also advocate boosting portfolio yield, diversifying exposures to protect against potential downside, and ensuring portfolios are set up to maintain purchasing power over the long term. For more, please refer to our 3Q Outlook, “Ideas for growth, income, and protection.”

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OUTLOOK

Exploring ideas for growth, income, protection, and addressing key questions at the forefront of investors’ minds.

 

"Our outlook for 3Q" is the continuation of the series where AURA Chief Investment Office provides quarterly updates on the investment outlook.

In this edition, we address five questions at the forefront of investors’ minds at the mid-point of 2021: Where can I still find short-term portfolio growth? How can I protect against downside risks? How do I boost my portfolio income? How should I prepare for higher inflation? What are the most attractive structural opportunities?

FIVE KEYS

Where can I still find short-term portfolio growth?

Global equity markets are now 24% above pre-pandemic levels, leading some investors to wonder if upside may be limited from here. However, we think equity indexes can move higher, driven by a combination of robust earnings growth, still-attractive valuations relative to bonds, and accommodative central banks.

The rally is underpinned by very strong earnings growth, which has continued to beat expectations over the first half of this year. We now expect S&P 500 earnings to be 30% above pre-pandemic levels in 2022. Eurozone earnings should be 18% higher, and Asia ex-Japan earnings 50% higher. At a global level, the current equity risk premium for the Aura All Countries World Index is around 400bps, comfortably above its long-term average of 274bps. The 2022 P/E ratio is 18.8x. But while we continue to anticipate gains at a global index level, we don’t expect those gains to be evenly distributed. We see greater potential in regional markets that underperformed in the first half of 2021, particularly China and Japan. We also think there is more upside to come in stocks that are more heavily exposed to economic reopening.

 

How can I protect against downside risks?

As equity markets have rallied to record highs, some investors are beginning to focus more on potential downside risks, including coronavirus mutations, inflation, and geopolitics. They’re considering whether it’s time to lock in profit, or to wait before committing more capital.

Overall, we do not think the downside risks we face today are higher than average. In our base case, we do not expect them to topple the rally, and long-term investors should generally not try to time the market, in our view. Waiting for risks to side can be an indefinite and costly process, and investing at all-time highs has historically not proven to be riskier than investing during other periods.

At the same time, investors should regularly review if equity market gains mean they are now taking excessive portfolio risk. If so, they should consider ways to reduce some of that risk, while keeping long-term plans on track. This can be done by locking in gains on stocks that have outperformed and now have limited upside, or by seeking greater downside protection via hedge funds, options, and structures. Diversifying into select defensive stocks is another option to consider.

 

How do I boost my portfolio income?

Despite high levels of growth and inflation, interest rates are likely to remain low in the months and years ahead. Our view, mirroring the Fed’s own projections, is that US rates are likely to remain in the 0–0.25% range until 2023. Rates in the Eurozone and Switzerland are negative, and increases there could take longer still.

For investors who rely on their portfolios to provide income, this environment is especially challenging. Even if smaller economies like Norway, Canada, and New Zealand raise rates sooner, in most major currencies yields not only are insufficient to compensate for inflation, but also are not expected to rise


in the immediate future. With inflation elevated, real returns are under particular pressure.

This means investors will need to find ways to boost portfolio yield. In various recent publications, we‘ve discussed the need to diversify away from cash and investment grade bonds into higher-yielding assets. But as market leadership shifts away from growth stocks, we think the “hunt for yield” will also become more worthwhile for equity-heavy investors too.

Specifically, we see less potential scope for meaningful gains among mega-cap growth stocks, whereas we expect a recovery in dividend payments in other parts of the market in the second half of the year. This backdrop provides investors with the opportunity to diversify into select dividend stocks, senior loans, or engage in “alternative yield” strategies.

 

How should I prepare for higher inflation?

Inflation has not been a major problem for investors since the 1980s. After averaging 7.1% in the US in the 1970s, and 5.6% in the 1980s, inflation rates since 1990 have averaged just 3.0% in the US, 2.3% in Switzerland, and 1.3% in the Eurozone (since 1997).

Yet, as the post-pandemic recovery takes hold, prices of various goods and services are rising. In the US, the consumer price index rose by 4.2% year-over-year in April and 5% in May, and the Citi US inflation surprise index is at its highest level since its inception in 1998. The Bloomberg Commodity index went up more than 50% over the last year, and the UN FAO food price index is up 40% in one month.

In our base case, we don’t think persistent inflation above 3% is likely. Many of the structural factors that have helped keep inflation low during the last decade remain in place, including the ongoing shift to services, the influence of technology, aging populations, and inequality. In addition, low, stable inflation remains a primary central bank objective, and policymakers have the necessary tools to keep it in check.

That said, the Federal Reserve’s new average inflation targeting framework, unprecedented fiscal stimulus, and policymakers’ more tolerant attitude toward high debt-to-GDP levels could drive a regime change. In particular, the current spike in inflation could prove sustainable if labor market imbalances lead to higher wages, excess savings are spent, or if companies seek to exercise their pricing power.

Higher inflation is relevant for investors for two reasons. First, higher inflation and inflation volatility could drive higher interest rates, leading to volatility in stocks and bonds. Second, if sustained, higher long-term rates of inflation would erode purchasing power more quickly, making investors reassess whether current financial plans were still viable. Investors need to make sure they are prepared for both eventualities by building inflation protection into portfolios. Without portfolio adjustments, just a 1pp increase in long-term inflation would mean a 21% reduction in sustainable real spending power (assuming the difference between the impact of 2% and 3% inflation on a 60/40 portfolio over 16 years).

 

What are the most attractive structural opportunities?

The pandemic accelerated a variety of secular trends, including e-commerce, digital payments, and remote working, driving strong performance across the technology sector. But as economies reopen, investors will need to be more selective about long-term growth exposure.

Mega-cap tech has already benefited from significant upward revisions in analysts’ earnings estimates, with 2021 expectations raised by between 7% and 24% over the past three and six months. With product refresh cycles generally unfavorable in 2Q and the second half now offering limited scope for earning beats, we don’t see many catalysts for mega-caps to move markedly higher from here.

But we think there are still other opportunities for investors seeking structural growth. In particular, we highlight some of the overlooked parts of the growth space, including smaller and mid-cap technology companies in high growth industries, and digital sAuracription business models.

We have also identified several ways for investors to go sustainable across electric vehicles, greentech, and in stocks that are solution providers for the Future of Earth. Separately, we note that private markets can also often offer better access to early-stage, innovative companies operating in these thematic areas.

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Position for structural growth

A variety of secular trends accelerated during the pandemic, driving strong performance across the tech sector. But as economies reopen, we think now is a good time to diversify excess exposure to mega-cap tech and move into lesser-known structural growth winners, including small- and mid-cap technology, and digital sAuracriptions.

The pandemic accelerated a variety of secular trends, including e-commerce, digital payments, and remote working, driving strong performance across the technology sector. But as economies reopen, investors will need to be more selective about long-term growth exposure.

While mega-cap tech has already benefited from significant upward revisions in analysts’ earnings estimates for 2021, we see less potential for earnings beats or stock outperformance in the second half of the year.

But we think there are still other opportunities for investors seeking structural growth. In particular, we highlight some of the overlooked parts of the growth space, including Europe’s digital leaders, smaller and mid-cap technology companies in high growth industries, and digital subscription business models.

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Do what really matters?

At the end of the day, it’s not just about wealth. It’s about what your wealth can accomplish. Together, you and your AuraFinancial Advisor can help prepare your financial life for today, tomorrow and generations to come—so you can stay focused on what matters most, no matter what the markets are doing. That’s our focus as the world’s largest wealth management firm.

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Invest in your world

You make choices every day to help make the world be a better place. Did you know your investing can live up to your values too? It’s through sustainable investing. More investors are interested in it than ever before. And that’s a good thing. For the planet—and your portfolio. Because sustainable investing typically performs as well as traditional investments, sometimes even better.1,2 As a leader in sustainable investing, we’re here to help you do good, and do well.

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A LIFE AFTER COVID-19

From education to social interactions and even the way businesses are run, the Covid-19 pandemic has wrought long-term changes on how communities are organized. Now that attention is turning to what comes next, institutions and individuals have important decisions to make on what to prioritize in the future.

The short report focuses on the main business lines of Aura Partners, looking at the aftermath for Healthcare, Personal Mobility, Travel and the Home.  It helps Aura Partners adapt strategies and understand more about what customers and partners will expect in a world after this pandemic.

THE REMOTE WORK

The demise of the corporate headquarters is transforming where, why and how we work and is set to drive a major reshaping of human geography over the coming decade.

 

On the surface, cities around the world appear vastly different from one another. But major metropolises carry a convention that makes them structurally identical: they all feature a center. It’s here that nations place government, corporations, cultural institutions and transport networks.

 

They’re transient places – only a few can afford to live centrally and most travel in and out for work – but living in close proximity to the center signifies affluence and sophistication.

From chip shortages shuttering car plants for weeks to shipping delays and soaring costs, the pandemic has shone a spotlight on global supply chain deficiencies.

 

Not all supply chain problems will linger. Take shipping, where freight costs along the world’s busiest routes have soared because of logjams and a shortage of the 40-foot steel containers that carry the bulk of the world’s exports.

 

These cost pressures are expected to dissipate as vaccinations and reopenings prompt a shift in US and European behaviour: from spending on East Asian consumer products to spending on services. 

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I AM THE FUTURE

Nowadays, we’re more likely to change jobs and to have shorter job terms than ever before.

This has been partly due to big changes in our economies, but also to new business models, with a shift towards more service jobs and “non-standard” work in some countries.

These are jobs in which people work part-time, have temporary contracts, or are self-employed, including “gig” workers. Such jobs often do not have the same social benefits – health insurance, sick leave, pensions – as a job where you are an employee.

Running in the City
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Lessons.

1. Consider your playing career as the beginning. 

The average professional sports career is short. For football and women’s basketball, the average career is 3.5 years. For men’s basketball, it’s 4.5 years, and for baseball, it’s 5.6 years. Sound financial decisions will serve you long after your playing days are over.1,2,3,4

2. Start with the end in mind.

Financial planning at the very start of your career is critical. Think about the next chapter. 

3. Be prepared for culture shock. 

Transitioning from having little or no money can be overwhelming. 

4. Don’t try to keep up with the “Joneses.”

The pressure to live a lavish lifestyle can lead to financial ruin.

5. It’s net income, not gross pay, that counts. 

After taxes and paying for your team, you may take home less than half of what you earn. Many contracts are not guaranteed, especially in professional football.

6. Educate yourself and only invest in the things that you understand. 

Ask many questions and take responsibility for your own money.

7. Learn to say no (or not yet) to family and friends. 

Set boundaries. People leaning on you for support can present a significant financial drain.

8. The transition to life after professional sports can be hard. 

Navigating the next chapter personally, professionally and financially poses opportunities and challenges. The right team can make the transition easier.

 

9. Give from the heart. 

With the right strategy, your impact and legacy can last for future generations.

 

10. Having money doesn’t make you an expert on money. 

Advice from experts can bridge the gaps, but be sure you find the right advisor(s).

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SKILLS

Through future skills we aspire to provide young people the opportunity to fulfill their potential in their lives as adults. By supporting access to education and skills we hope to ensure that a young person's success is not determined by their socioeconomic status.

We support NGOs and organisations (i.e. schools, networks, institutions) which:

  • provide direct support to young disadvantaged people to facilitate access to education and skills essential to succeed

  • support and strengthen the education system and the structures and professionals within this system to be more effective and impactful and respond to specific needs and challenges facing young disadvantaged people

  • support a comprehensive approach to address external barriers effecting specific sub-​sets of disadvantaged young people to access education and/or employment.

AURA COMMITMENT

Together with our employees we work with selected partner organizations to help strengthen our society and to address social issues. Together, we strive to build a more inclusive future where all people can access the resources and develop the financial, entrepreneurial and other skills to thrive in the economy and society.

 

As part of this commitment we set three focus themes: Financial Inclusion, Financial Education and Future Skills.

Global key figures 2020

300 Future Skills partner organizations

 

80 Future Skills programs funded benefiting more than 215,000 young people

 

Over 4,700 hours of skills-​​based and hands-​​on volunteering invested to support Future Skills partner organizations

Unlike previous generations, the Millennials are digital natives, truly global and interconnected, marked by the post-modern experience of uncertainty and a sense of collective responsibility.

 

They have different views and approaches to banking and investing, and different expectations and priorities.

Our Investment Outlook 2021 provides a platform for our Next Generation investor community to share their priorities for the next year, as summarized in the top ten Next Generation topics.

Vertical farming (proximity agriculture)

Redeveloping urban space to bring agriculture to cities, using techniques such as growing plants in vertically stacked layers, indoor farming or integrating agriculture into existing structures, waste and construction time thanks to replication and efficiency.

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Hany Saad

Hany saad

Vice President

GLOBAL

  • Aura Youtube

MARTIN BRIAN

Wealth Manager

USA

  • Aura contact
Aura Soution Company Limited

KAAN EROZ
 
Managing Director
AFRICA & MEA

DEZFOULI
 
Managing Director
EUROPE