Insights

Many investors swear by share investing. Many investors prefer investing in direct property. What is best for you? The answer depends on your personal investment needs and objectives and, importantly, which strategy you are comfortable with.

The following overview of both strategies may help you make a more informed decision when it comes to investing.

Investing in shares

Why are shares so popular?

• Shares have historically outperformed all other assets classes over the long term.
• Shares can provide long-term capital growth.
• Shares can provide a strong and growing income stream.
• Available tax benefits by investing in companies that pay franked dividends.

What are the challenges?

One of the more obvious challenges when investing in any sharemarket is volatility.

From the 'Black Monday' crash in 1987 to interest rates rising to around 18% in the late 80’s and early 90’s through to the general market decline in 1994, onto the 1997 Asian crisis and then the tech and internet stock boom and bust in 2000. Of course, we will never forget the 'GFC', or Global Financial Crisis, in 2008 and now, most recently, the significant fall and subsequent rise of markets through 2020 due to COVID-19.

Shares are often considered risky due to potential short-term performance volatility. Over the long term, however, shares have provided consistent investment returns.

Chart 1: Australian Shares (S&P/ASX200) vs Cash (Bloomberg AusBond Bank Bill Rate): 2011 to 2021

The Australian sharemarket is dominated by large institutions e.g. the banks, CSL and BHP. The financial sector makes up approx. 45% of the S&P/ASX200 Index. The performance of this sector, therefore, can influence the direction of the market.

Individuals invest in direct shares because they offer the possibility that their price will rise over time. Owning a share with a rising value provides growth from that investment - and an obvious benefit of capital growth is that it can offset the effects of inflation. In addition to rising share prices, dividends and dividend re-investment plans can multiply the capital growth effect of a share investment.

^{Note: Important disclosures can be found in the Disclosure Appendix}

Tax benefits via imputation credits

The 'Dividend Yield' is the theoretical return from dividends if shares are purchased at a prevailing price. The dividend is shown as a percentage of the last sale price and is usually referred to as yield.

Many dividends paid to shareholders include 'imputation credits'. The imputation credit system was introduced in 1987 as a solution to the problem of company profits being taxed twice: once at the company tax rate, and again when a shareholder received a dividend, which was then taxed at their marginal income tax rate.

When shareholders receive dividends from companies' after-tax profits, they are entitled to an imputation credit (also known as the franking credit), which means they pay less tax on their dividend income. Indeed, if the investor's imputation credits are greater than the amount of tax payable, any surplus imputation credit is refunded to the investor (see below). Investors generally need to hold shares for at least 45 days to qualify for imputation credits.

Most companies listed on the Australian Stock Exchange that pay dividends to shareholders include imputation credits. In fact, the percentage of dividends franked by S&P/ASX 200 stocks has increased steadily from around 80% in 2008 to 85% in 2016.

The imputation credit and resulting tax benefit available from the dividends means the actual return from that particular stock needs to be "grossed up" to reflect its true value. A common mistake investors make is comparing bank rates with dividend yields. The cash rate is fully assessable whereas the dividend yield includes the imputation credits, so you need to take this tax concession into account. For example, a 2.5% fully franked dividend yield is actually providing a grossed-up return of approximately 3.6% when you take into account the added tax benefit.

Table 2 highlights the grossed-up effect of various dividend yields, as well as the equivalent after tax yield based on flat 15% (super), 32.5% and 45% tax rates.

Table 2: Grossed-up effect of yield

Surplus Franking Credits

Where there is a surplus of franking credits due to the fact the individual or entity's tax rate is lower than the 30% company tax rate, the surplus credits are refunded to that individual or entity. For example, the maximum tax rate within superannuation is 15%. Fully franked shares within a self managed super fund (SMSF), therefore, provide a 15% tax credit. This credit can be used to offset tax on other income within the fund.

If the SMSF is in pension phase, where the tax rate is 0%, franking credits are fully refunded back to the fund. This has the effect of 'topping up' the pension's account balance. Over time this can add substantial value to the fund.

Easy access

One of the key advantages of investing in direct shares, of course, is the flexibility and liquidity it provides. The Australian Stock Exchange (ASX) provides an environment for Australian investors to easily purchase or sell shares, or rebalance portfolios, in a timely and cost-effective manner. Shares can be sold in parcels or as a total portfolio with relative ease.

Investing in direct property

Property is generally viewed as a long-term investment. It can play a valuable role in an investor's overall wealth creation strategy as it can provide added diversification to balance a sharemarket portfolio and help boost overall wealth.

There are three main ways a property can create wealth:

1. Capital: the value of the property increases
2. Income: generated from rental returns
3. Tax: deductions available which can be offset against assessable income

It can be said that the popularity of property investing has much to do with human nature, as we are inadvertently drawn to what we apparently know and understand.

The benefits of property

• Property can be a fairly secure, long-term investment.
• It is a solid, tangible asset that is considered low to medium risk (in contrast to shares which can be considered 'high risk').
• It can 'pay itself off' when the rent covers the loan repayments (except if the investment is negatively geared).
• It can provide significant tax benefits via depreciation and deductions on the costs and general upkeep of the property, if the property is being used to produce income.

What are the challenges?

Like every investment, owning property entails expenses and risks.

• There may be significant purchase costs, including legal costs, stamp duty, property inspection fees.
• Generally, most people need to borrow additional funds to purchase a property so add loan establishment fees and interest rate risk on to the above point.
• There may be significant holding costs, including maintenance, rates, body corporate fees and property insurance.
• The rental return may not meet income expectations (there is a direct relationship between the value of a property and its rental income).
• Vacancy issues. Mortgage payments still need to be met which could result in a drain on cashflow.
• Bad tenants who may incur substantial damage to the property, refuse to pay rent or even refuse to leave. Disputes can take months to resolve in some cases.
• Liquidity issues. It can take time to sell depending on the asking price and the state of the property market. This may cause further problems particularly if the seller needs fast access to funds.
• Lack of diversification by having funds tied up in one asset.
• Property location can be an important factor.
• Property markets can be turbulent. Like shares, property prices can fluctuate. Unlike shares, property prices cannot be monitored on a daily basis.

Borrowing to invest

As mentioned, most property investors borrow to purchase an investment property. There are three basic strategies to consider if you are going to borrow.

• Negative gearing: where cost of borrowing is greater than income received
• Neutral gearing: where cost of borrowing is equally offset by income received
• Positive gearing: where total income is greater than the cost of borrowing so that a cashflow surplus is generated

There is a common misconception that negative gearing is always the best strategy for property investing. The popularity of negative gearing a property it can be argued has more to do with the comfort of owning property as an investment rather than it being the best investment strategy.

It is important to bear in mind negative gearing means the investor must have adequate revenue from other sources to service the difference between investment income and outgoing costs. This can place a significant strain on cash reserves over the long term and actually backfire if a disciplined budgetary approach is not taken.

However, rental market conditions and interest rates offered, particularly in relation to residential property, may limit the choice of strategy available to the investor. If investing in commercial property, which generally offers higher rental returns, then a positively geared strategy may prove more feasible.

Practical issues

For borrowing to be appropriate, the following general conditions are recommended:

• The investor should have sufficient income to meet the expenses arising from the investment, including loan repayments, maintenance fees, insurance etc.
• The investor generally needs to own other assets which can be offered as security for the loan.
• The investment should have the potential for income and capital growth.
• Commonly, investment loans are interest-only to obtain the maximum tax advantage, however, principal & interest repayments may be required (SMSFs owning property are now required to make P&I repayments, for example).
• Accept that the strategy provides maximum return over a longer time period.
• Recognise that borrowing increases both potential return and risk.
• Borrowing to invest produces a specific obligation to service a debt. One of the critical elements of this type of strategy is to ensure continuity of income. Income protection insurance should be maintained by the investor in this regard.

Risks associated with borrowing

• Investment income risk: if investment income is lower than expected or does not grow as expected, the negative cashflow will be larger than expected and continue for longer. Negative cash flow needs to be covered by income from other sources (usually salary).
• Risk of capital loss: if the capital value reduces and the investment is sold, the proceeds may not cover the loan. The remaining loan balance will need to be repaid from other assets.
• Interest rate risk: interest rates on the loan may rise, increasing the negative cash flow needing to be covered from other sources. This risk can be managed by using fixed rate loans if applicable.
• Income risk: normal living costs still need to be met as well as the negative cashflow. What contingency plans does the investor have if salary is reduced overtime, or income ceases because of redundancy, sickness or injury, or death of the investor or their partner? Income and living costs can change following the ending of a relationship, separation or divorce.

Many of the risks arising from a reduction in income should be fully covered by insurance. Insurance should cover death, permanent and temporary disablement and most importantly, income protection. Insurance should not only cover the investor but also the partner, if applicable, as a significant change in the partner's circumstances can also significantly affect surplus cash flow available to cover negatively geared investments.

Everyone will have their own opinion as to which investment strategy is best. For many Australians, property ownership is a rite of passage. However, shares can never be overlooked as a convenient, tax effective long-term solution to generate income and wealth.

For investors approaching retirement, holding an overweight position in direct property may not be the best strategy given investment needs change in retirement.

Estate planning focuses on wealth preservation and wealth transfer. Its objective is to preserve family wealth by effectively distributing it to nominated beneficiaries in the most effective way.

It requires a consideration of each beneficiary’s personal and financial circumstances to determine the best means of providing an inheritance without unfairly affecting the beneficiary’s existing situation.

Three questions to ask yourself

When planning how your estate is to be distributed to your beneficiaries consider the following issues:

1. How will the inheritance affect your beneficiary's income tax?
2. Will there be any capital gains tax consequences?
3. How will the inheritance affect your beneficiary's Centrelink benefits?

Understanding these issues so that you achieve the maximum financial benefit for your beneficiaries should be a priority.

Income tax

When a person dies, the family, in particular the spouse, will generally inherit all of the deceased's assets.

The beneficiary, or beneficiaries, will pay tax on any income from the estate assets at his or her marginal tax rates. If the beneficiary was already in receipt of income, the additional income could result in an increased marginal tax rate for that person. This results in their paying more income tax than was previously the case.

A possible solution to this problem is for a Discretionary Will Trust, or Testamentary Trust, to be established on a person's death. The assets are transferred into the Trust and income can then be allocated in a tax effective manner to intended beneficiaries.

As a result, significant tax savings could be achieved. A discretionary trust means just that – discretion as to how and to whom income can be distributed.

Minors, or children under age 18, can receive income at normal marginal tax rates instead of the penalty tax rates that usually apply.

Capital gains tax

The death of a person does not normally constitute a taxable disposal of any part of their estate for capital gains tax purposes. However, it does represent a new acquisition by either the executor of the estate, or the direct beneficiaries of the assets.

This is relevant if the executor or beneficiaries subsequently sell the assets - at that time capital gains tax could be realised. The cost base used by the person subsequently selling an estate asset depends on when the deceased initially acquired it.

If the asset was bought before 20 September 1985 (pre-CGT) the beneficiary will use the deceased's date of death to determine the cost base. If the asset was bought after 20 September 1985 then the beneficiary will inherit the deceased's original cost base.

Centrelink benefits

Receiving an inheritance could be problematic for individuals already in receipt of Centrelink benefits. This is because the individual's existing income and assets position determines how much they are entitled to receive.

The receipt of an inheritance can potentially trigger an increase in both the assessable income and assessable assets, resulting in a reduction or loss of entitlements.

Loss of Centrelink benefits could also mean the loss of other benefits that may be available, eg medical, pharmaceutical, transport and accommodation concessions. This outcome could be quite upsetting for the beneficiary.

Unfortunately it is not a simple matter of renouncing an inheritance either. A beneficiary cannot forsake their inheritance as Centrelink will then deem the amount forsaken under their "gifting" rules.

Gifting rules limit how much can be given away by a Centrelink pensioner. The limit is $10,000 in a year or a maximum amount of $30,000 over a continuous five year period.

If the beneficiary gives more than the allowable limit away, Centrelink will deem the excess amount over the next five years, resulting in a reduction of benefit payments in any case.

There are strategies that may be appropriate – for example, Testamentary Trusts – but this area can be quite complex and if not structured correctly the beneficiary pensioner could still be fully assessed by Centrelink under Trust rules. For this reason, it is very important professional advice is sought beforehand.

Superannuation

Superannuation does not automatically come under the scope of a Will, unless the person has specifically nominated their estate as the beneficiary of death benefits. In most cases, however, superannuation funds are left directly to dependants of the deceased. A dependant under superannuation law means the spouse (including de facto spouse) and any child of the deceased.

However, different tax treatments apply for payment of death benefits to children under age 18 versus children over age 18. This is because the definition of "dependant" for tax purposes is not the same as superannuation law.

For tax purposes, a child of the deceased who is over age 18 and not financially dependent at the time of death will be considered a non-dependant.

Death benefits paid from a deceased person's superannuation account, if paid to a "tax" dependant, can be in the form of either a lump sum or an income stream. Death benefits paid to non-dependants must be paid as a lump sum.

This means that before considering any strategies for estate planning, and how death benefits should be paid to either dependants or non-dependants, a review should be undertaken on your superannuation fund's ability to pay death benefit payments in the various forms.

That is, will the fund allow payment of a reversionary income stream, lump sum or combination of both? If a self managed superannuation fund, does the Trust Deed include these provisions? The area of estate planning for superannuation is quite complex as you can see.

If not planned for appropriately your beneficiaries could end up paying more tax than they have to. Or you could inadvertently establish an invalid nomination for payment of benefits.

In this instance, the trustees of the fund will use their discretion as to how your benefits should be distributed and this may not be in accordance with your wishes.

From a tax and investment perspective, depending on what is appropriate, investors generally consider strategies that defer income to the new financial year, bring forward deductible expenses and minimise capital gains.

Claiming all available tax deductions

Prepaying interest on an investment loan is a popular strategy as it brings forward 12 months’ worth of deductions into the current financial year. It's also a practical strategy when considering your cashflow for the new financial year.

However, remember you are 'locking in' the interest rate for the next 12 months so if interest rates drop during the year you will not receive any reduction in rates. Similarly, if interest rates rise you will not have to pay a higher rate.

If you worked from home due to COVID-19 restrictions at any time during this financial year the ATO has set a flat rate of 80 cents per work hour for running costs (electricity, phone, internet, etc) for each day you are required to work from home up to 30 June 2021. Make sure you keep a diary or timesheet of your hours each day.

If you have incurred expenses that are directly related to earning your income whilst working from home you may prefer to claim these actual expenses as a tax deduction rather than using the flat 80 cent rate. We recommend you speak to your accountant to work out which method best works for you.

Franking credits

Investing in listed shares that pay 100% franked dividends is an effective income strategy used by many investors, particularly those on a low marginal tax rate.

The grossed-up value of franking credits provides a more tax-effective return than normal bank interest rates. Any surplus franking credits are refunded to the investor.

Capital gains and losses

Do you know the capital gains and/or losses position of your investment portfolio? Have you sold investments during this financial year that realised a capital gain, or loss?

Losses can be carried forward (including from previous years); however, capital gains must be declared in year-end returns for the financial year the gain was made. You may be eligible for a discount on any assessable capital gain if you have held the asset for more than 12 months.

Tip: Speak to your adviser to learn how you might be able to utilise contributions to super to help offset capital gains if you are eligible.

Share Purchase Plans and Rights Issues

Have you participated in share purchase plans this year as part of capital-raising strategies offered by listed companies?

If you have purchased additional shares as a result, make sure you retain your records for cost base purposes. You will need this information should you decide to sell the shares in the future.

Private companies and trusts

Don’t get caught under Division 7A rules which refers to the use of company assets by shareholders, their family members and associated entities such as trusts. The ATO will treat withheld trust income as a loan back to the trust.

This will apply where the income has been allocated to beneficiaries, but no actual distribution has been paid. In relation to family trusts make sure distributions for the financial year have been resolved and documented by 30 June.

Tip: Seek specialist tax advice from a registered tax agent if you would like more information on whether the above issues are relevant to you.

Afterpay Limited (ASX:APT) recently shared its 3Q21 business update, unveiling key performance metrics and strategic moves that warrant a closer look.

Impressive Growth

Group sales surged to A$5.2bn, marking an impressive 100% increase on a year-on-year (pcp) basis. However, a sequential dip of 9% was noted from the seasonally robust 2Q21.

Robust Customer and Merchant Growth

Group customers and merchants witnessed substantial growth, soaring by approximately 75% on pcp. Sequentially, both customers and merchants demonstrated notable increases of 11%-15% compared to 2Q21.

Stable Margins and Loss Rates

Management emphasized the stability of group margins, remaining firm despite market fluctuations. Additionally, loss rates continued to stay below historical levels, contributing to Afterpay's resilience.

Strategic Moves and Initiatives

Exploring a US Listing

Recognizing the North America division as the largest contributor to the group, Afterpay is set to explore the possibility of a US listing. This move reflects the company's commitment to harnessing the vast potential of the North American market.

Financial Services Expansion

Afterpay's foray into financial services includes the exploration of APT Money, expected to launch in 1H22, with ongoing testing of deposit and savings accounts. This diversification aligns with Afterpay's growth strategy.

Global Expansion

Afterpay's global footprint expanded with launches in Spain, France, and Italy during 3Q21. Clearpay is on track to launch in Germany in 1H22, underscoring the company's commitment to worldwide market penetration.

Performance Evaluation

Amidst the dynamic landscape, revenue margins in 3Q21 remained robust, consistent with 1H21 levels. Customer transaction frequency surged globally, with the top 10% of customers transacting 33 times a year, showcasing a loyal and engaged customer base.

North America emerged as a powerhouse, reporting a remarkable 167% growth on pcp. This region's sales, coupled with strong merchant growth and in-store momentum, solidify North America's position as the leading contributor to group sales.

Forecast Adjustments

Despite the positive momentum, Afterpay adjusted its FY21F/FY22F EPS forecasts, lowering them by 7%-8% due to slightly revised sales growth assumptions.

Investment View

While Afterpay is acknowledged as a quality business, the current valuation prompted a Hold recommendation. Analysts remain vigilant on valuation grounds, recognizing the dynamic nature of the market.

Afterpay's 3Q21 update reflects a blend of remarkable growth, strategic exploration, and market resilience. The company's agility in adapting to market shifts and its ambitious global expansion plans position it as a notable player in the evolving landscape of the fintech industry.

We all want the very best for our children. We know that a good education not only provides them with qualifications it also provides them with opportunities. Knowing they were given every possible chance to express themselves and learn is probably the best gift you can give a child or grandchild.

We also know that a good education can be expensive.

What education savings choices do you have to ensure your “investment” does not become a financial burden? We list three options below:

• Australian share investment
• Managed funds / Listed investment companies (LICs)
• Investment bonds - Insurance bonds & friendly society bonds

Listed Australian Shares

Investment in Australian shares, which pay fully franked dividends, is one option. Imputation credits currently provide a rebate of 30 cents in the dollar which means you pay less tax on your dividend income.

Shares are one of the highest performing investment sectors over the longer term; that is, five or more years, which is the typical time frame most people are considering for education funding.

It is important to note that children under the age of 18 are by law not able to enter into a contract. Therefore, in most circumstances the account is opened in the adult's name (i.e. one or both parents, or grandparents) as trustee for the child or children.

This is generally known as an "informal trust". From a tax perspective, it is important you seek professional tax advice to determine which type of ownership will provide the most tax-effective outcome for you and your child.

This is because the trustee, or parent/guardian, could be liable for income and capital gains tax liabilities as a result of presumed ownership.

The other drawback with investing in direct holdings is that you can't establish a regular "top up" scheme, or savings plan; unless you invest via a company’s Dividend Reinvestment Plan, if available.

Considering most initial amounts gifted to children are fairly modest it is hard to achieve cost-effective diversification without at least $50,000 to invest.

So placing small amounts in a choice of one or two or three companies leaves you exposed to a higher risk if one or more of these investments fails or underperforms.

Managed funds / Listed investment companies (LICs) / ETFs

To overcome the issue of diversification many advisers suggest using a managed vehicle for children's investments. An unlisted managed fund or a listed investment company (LIC) are popular choices.

The advantage for both of these types of investments is that a manager makes all investment decisions for the investor and handles all administration matters (including detailed taxation statements).

Managed funds

Managed funds are a useful investment tool because you can establish an effective regular savings scheme; starting with a modest sum, typically $1,000, and investing as little as $100 on a regular monthly basis.

This approach also takes advantage of the dollar-cost averaging principle to reduce the market timing risk associated with investing in growth investments such as shares.

From a tax perspective actively managed share funds do tend to deliver realised capital gains on a regular basis although this is probably less critical under the current capital gains tax regime.

For investments held for more than 12 months only 50% of any realised capital gain is added to your taxable income and taxed at your marginal tax rate.

LICs

LICs often show more transparent value than a managed fund. An investor can see this value in the listed share price whereas a managed fund has a more complicated buy and sell "spread" value and a longer redemption period when withdrawing funds.

LIC annual management fees can also be lower than annual managed fund fees. Unfortunately, as with listed shares, LICs do not offer regular savings schemes.

ETFs

Exchange-traded funds, or ETFs, are becoming more popular and like LICs, provide the investor with an opportunity to access various markets with a smaller amount of money. ETFs are investment vehicles that provide exposure to a basket of shares, listed property, commodities or currencies.

They have a slight advantage over LICs in that they can be bought and sold for close to the value of the underlying asset (i.e. index).

This usually results in the ETF price very closely matching the performance of the index.

If the ETF’s underlying assets produces income, investors will receive regular income distributions. ETFs pass on this income untaxed and franking credits are also passed through.

Management fees are quite low compared to managed funds, ranging from as little as 0.15% to 0.8% for some international share offerings.

Investment bonds (Insurance bonds & friendly society bonds)

Investment bonds can be a useful vehicle when saving for education purposes. With many investments such as shares and unit trusts, responsibility for the payment of tax is passed on to the investor.

This means any profits or losses you make must be included in your annual tax return for the year in which you earn them. With investment bonds, earnings are retained within the investment funds and tax is paid by the provider.

Investors do not need to declare any income on their tax return until a withdrawal is made. If the investment is held for 10 years or more, there is no additional tax to pay. If funds are withdrawn before 10 years, the investor will receive a rebate which can be used to offset additional tax payable.

For this reason, investment bonds are a popular choice for education savings. Specific education savings funds are available, modelled via the investment bond structure, although provider choice is limited.

Education savings bonds are particularly designed for education expenses; however, some providers allow flexibility to use the bond for non-education expenses.

They are often cheaper than other alternatives, particularly where investments are restricted to cash or fixed interest. They can also be quite inflexible if your need for these funds change, so any decision to use them should be carefully considered.

Tax is paid by the bond provider at the rate of 30%. However, the actual tax rate can be lower due to franking credits if the fund invests in listed equities.

Tax benefits can be enhanced further for education related expenses as the tax is claimed back by the provider from the ATO and is included in withdrawal proceeds to the student.

Summary of education funding options

The investment option you choose, should best match your investment objectives and risk profile.

Tax may also play an important role when deciding which investment strategy to use. In that regard, it is important you seek qualified tax advice before implementing your strategy.

Contact your Morgans adviser or nearest Morgans office for more information.

In its latest 3Q21 trading update, Zip Co (ASX:Z1P) demonstrated yet another strong quarter, with group revenue, merchants, and customers all experiencing a substantial 10%-20% increase on the previous quarter, showcasing consistent growth trends.

Quadpay's Standout Performance

Quadpay, Zip Co's US-based business, emerged as the star performer, exhibiting impressive sequential growth in revenue, transactions, and customers. With an annualized transaction volume reaching US$2.8bn, Quadpay's resilience stood out in the seasonally weakest quarter.

Credit Quality and Global Expansion

Maintaining sound credit quality, Zip Co's net bad debts reduced from 1.93% to 1.78%, underscoring a healthy global merchant pipeline. The company is making strategic strides in global expansion, with initial merchant signings in the UK, a soft launch in Canada, and strategic investments in BNPL players in South East Asia and Eastern Europe.

Performance Analysis

Dominance in the US Market

In what is typically its weakest quarter, Zip Co's Quadpay reported impressive sequential growth, with substantial increases in revenue (+16%), transactions (+7%), and customers (+19%). Quadpay's merchant base witnessed a remarkable 55% sequential growth.

Solid Results in ANZ

Zip Co's results in the Australia and New Zealand (ANZ) region, while meeting expectations, revealed a 61% year-on-year increase in transaction volume. However, the sequential decline of 8% aligned with seasonal trends.

Forecasts and Outlook

Minor adjustments to sales and profit margin forecasts led to a modest 2%-4% downgrade in Zip Co's FY21F/FY22F earnings per share (EPS).

Investment View

Despite the adjustment, Zip Co continues to execute well, delivering strong growth metrics across the board. The company's ambitions to become a global payments player position it for long-term upside, especially considering its significant discount to Afterpay Ltd (ASX:APT) in the EV-to-sales multiple.

This comprehensive performance overview reinforces Zip Co's resilience and strategic positioning in the dynamic buy now, pay later (BNPL) landscape.