Investment Education
Forum Archive 2006
This quarterly newsletter addresses industry issues or advanced investment topics suitable for supplementing your investment knowledge. Copies of the papers listed below can be found under the investment education section of ClientLINK.
The Sting in the Tail
First Released: October 2006
If you believed everything you read in the industry press and hear at conferences, you’d be convinced by now that alternative assets are the panacea for super funds. Their low volatility, lack of correlation with major asset classes and each other, on top of forecast robust returns and intuitive appeal make a compelling investment case.
Fixed Income: Innovation in Asset Structure and Investment Strategies
First Released: September 2006
On August 2 the Reserve Bank announced a 0.25% increase in the official discount rate, the second this year. The move didn’t come as a particular surprise and the market consensus is that there are more increases to come. So investors could certainly be forgiven for asking “why invest in bonds?” and, more particularly, “why invest in bonds, now?” The answer will depend on the role bonds play in the investor’s portfolio.
Do Not Drop The Baton When Managing Your Portfolio's Structure
First Released: August 2006
Twenty years ago, when Russell first set up in Sydney, most superannuation funds were managed by one or more balanced managers. How times have changed! Sector specialists dominate the market now. The typical super fund will have exposure to upwards of a dozen investment managers, either directly or indirectly through a multi-manager provider. From an investment strategy perspective, this is significant progress.
Risk: You Don't Want to Live With It; You can't Invest Without It
First Released: July 2006
Risk is the sine qua non1 of investment. Without it, investment markets would not exist. It deters the cautious and penalises the imprudent, but it is also the reason why, over long periods of time, stockmarkets outperform bonds. The prospect of extra return is the incentive markets provide to encourage investors to take risk.
Investment Choice: Evolution is Relative
First Released: April 2006
Charles Darwin and Albert Einstein never met and certainly never traded shares with one another. Nonetheless, both have left an indelible mark on the way we view the superannuation industry. In the hostile Choice of Fund environment, the evolution of superannuation funds and the products and services they offer is likened to the “survival of the fittest” – funds that don’t evolve will become extinct. But Einstein would argue that evolution, like all things, is a relative concept. How we view it depends on our perspective - where we are now and where we have come from.
Note: These articles are presented in PDF format. You must have Adobe Acrobat Reader installed on your computer to view PDF files.