Marketable Securities in Australia: 2025 Guide for Investors

Australian investors are facing a rapidly evolving landscape in 2025. From new tax rules to shifting market dynamics, understanding the role of marketable securities has never been more crucial. Whether you’re an individual investor, SMSF trustee, or small business, marketable securities can help diversify and strengthen your financial position.

What Are Marketable Securities?

Marketable securities are liquid financial assets that can be quickly converted into cash at fair market value. Typically traded on public exchanges, these instruments include:

• Shares in ASX-listed companies

• Government and corporate bonds

• Exchange-traded funds (ETFs)

• Commercial paper and other short-term debt securities

Unlike term deposits or property, marketable securities can be sold within days—sometimes seconds—making them a favourite for both institutional and retail investors. In 2025, the ASX continues to experience high trading volumes, with ETFs and bonds gaining traction as interest rates remain higher than pre-pandemic levels.

Why Are Marketable Securities Important in 2025?

Recent economic shifts have highlighted the value of liquidity and flexibility. Here’s why marketable securities stand out in today’s environment:

• Instant Liquidity: Sell quickly to capitalise on opportunities or cover unexpected expenses.

• Portfolio Diversification: Easy access to various sectors, geographies, and asset classes.

• Potential for Growth: Participate in market rallies or defensive positions via bonds and ETFs.

• Regulatory Clarity: The Australian Securities and Investments Commission (ASIC) has introduced clearer reporting standards for 2025, increasing transparency for investors and companies alike.

For example, an investor holding $50,000 in ASX shares and $20,000 in government bonds can swiftly rebalance their portfolio as market conditions change. Meanwhile, businesses often use marketable securities to park excess cash, ensuring funds remain accessible for payroll or expansion plans.

Tax and Regulatory Updates for 2025

This year, several updates have changed the landscape for marketable securities:

• CGT Discount Tightening: As announced in the 2024-25 Federal Budget, some capital gains tax (CGT) concessions for marketable securities held less than 12 months are being phased out, impacting short-term traders.

• Franking Credit Changes: The ATO has tightened rules around franking credits, particularly for hybrid securities and off-market share buybacks, affecting how investors claim tax offsets on dividends.

• Mandatory e-lodgement: All trades and holdings must now be reported electronically, streamlining compliance for individuals and SMSFs but requiring up-to-date digital systems.

• ESG Disclosure: Listed companies must disclose more information about environmental, social, and governance (ESG) risks, impacting the transparency and attractiveness of some securities.

Investors should regularly review their holdings and consider the after-tax impact of buying and selling marketable securities, especially given the new rules. For example, a short-term profit on a tech stock might now attract a higher CGT than in previous years, while long-term ETF investors could still benefit from discounts.

Smart Strategies for Australian Investors

With new policies and market conditions in play, how can you make the most of marketable securities in 2025?

• Stay Liquid, But Don’t Overtrade: Use the liquidity of marketable securities for flexibility, but avoid excessive trading that can erode returns through taxes and brokerage fees.

• Leverage ETFs for Broad Exposure: ETFs offer instant diversification and are ideal for investors seeking simple, low-cost access to the market.

• Monitor Regulatory Shifts: Keep an eye on ASIC and ATO announcements, especially regarding tax and disclosure rules.

• Align with Your Financial Goals: Whether you’re saving for a home, building retirement wealth, or managing business cash flow, choose securities that match your risk and liquidity needs.

For instance, a young investor with a long time horizon might prioritise growth shares and ETFs, while a retiree could favour high-grade bonds and dividend-paying stocks for income and stability.

Conclusion

Marketable securities are a powerful tool for Australian investors and businesses seeking liquidity, diversification, and growth. With 2025’s policy changes and market trends, it’s more important than ever to understand these assets, review your portfolio, and make informed decisions that align with your financial goals.