What truly built wealth for Australian investors over the past twenty years? This question is at the heart of the inaugural Livewire Long Term Investing Report, which aims to provide a comprehensive analysis of asset performance. Collaborating with Kerry Sun from Market Index and property research firm Cotality, the report evaluated the performance of seven key asset classes: Australian and U.S. shares, residential investment property, A-REITs, bonds, physical gold, and cash.
The findings not only reflect past performance but also intersect with current realities and future challenges, offering investors, advisers, and asset allocators a timely opportunity to reassess their strategies for long-term success. As the report details, the results may surprise even seasoned investors.
Methodology and Approach
The report measures total returns across seven major asset classes over the past 20 financial years, from FY2005/06 to FY2024/25. Notably, Bitcoin and emerging markets were excluded due to their nascent status and peripheral role in core portfolio holdings. Total returns assume reinvestment of dividends, coupons, rental income, and other cash flows.
Unique to this analysis is the treatment of investment property, often misrepresented by commentators who focus solely on price growth. Cotality provided nationwide dwelling value data, applying a Hedonic Total Return Index that combines capital growth and rental income, offering a consistent benchmark for assessing long-term residential property returns.
Asset Class Performance: From Cash to Gold
Cash: Safe, Yet Self-Defeating
Cash, often considered a safe haven, returned just 3.03% annually over 20 years, merely matching inflation. The Reserve Bank of Australia’s cash rate fluctuations highlight cash’s diminishing role in wealth creation. While it preserves capital short-term, it erodes wealth long-term.
Australian Fixed Interest: From Stability to Volatility
Australian bonds delivered a 4.24% annual return until post-COVID inflation shocks disrupted their stability. The once-stable bond market faced real losses for the first time in a generation, challenging the traditional “60/40” portfolio strategy.
A-REITs: High Yield, Hard Lessons
Australia’s listed property trusts returned 5.05% annually, with significant volatility. The sector suffered during the GFC and the 2020 pandemic but is now recovering, driven by falling interest rates and demand for data centers amid the AI boom.
Australian Shares: Income Over Growth
Australian equities delivered a 7.55% annual return, beating inflation but lagging behind global growth markets. The ASX 200’s reliance on banks, miners, and supermarkets limits its growth potential compared to markets dominated by global innovators.
Investment Property: A Stable Wealth Engine
Investment property outperformed Australian equities with a 9.16% annual return, offering a smoother investment path. The housing boom from 2010 to 2020 turned many investors into landlords, highlighting property as a cornerstone of Australian wealth.
U.S. Shares: The Silicon Rally
U.S. equities, driven by Silicon Valley’s innovation, returned 10.53% annually, earning them the silver medal. The rise of tech giants like Apple and Microsoft underscores the U.S. as a hub of compounding capitalism and innovation.
Gold: The Quiet Achiever
Gold emerged as the top performer with a 10.74% annual return. Its role as a diversifier and hedge against economic uncertainty has been reinforced by central bank buying and its performance during market downturns.
Implications and Future Considerations
These findings highlight the importance of asset diversification and strategic allocation. Gold’s performance suggests it deserves a place in diversified portfolios, while the need for balance between income-generating assets and growth drivers is clear.
For investors, the key takeaway is that wealth is built by owning productive assets and maintaining a long-term perspective. As the investment landscape evolves, so too should strategies, ensuring alignment with future economic realities.
Download the full Livewire Long Term Investing Report 2025 Chart Pack for a detailed exploration of these findings and prepare for the next twenty years of investment opportunities.
