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Investment Articles
The Impact of Smoothed Unlisted Returns ... and the Father-in-Law Effect
Superannuation funds with high allocations to unlisted assets considerably outperformed in the recent bear market. The question is, are unlisted assets truly ‘lower risk’ than their listed equivalents? In this paper, Gareth Abley of MLC Implemented Consulting looks at the evidence that supports the argument that the positive performance of unlisted assets are due to valuation lag. Regardless of this, he argues that the psychological benefits of “smoothed” unlisted returns are quite real to the individual investor. He then explains the trade off between these psychological benefits and some of the hidden financial costs which are not as commonly known.
Property Investing for SMSFs
In recent times, more and more people are approaching their financial advisers to set up their own self managed superannuation funds (SMSFs) to invest in property. This is hardly surprising as most people want to be masters of their own destiny and the relatively new “instalment warrant” provisions may now provide an opportunity for superannuation funds to borrow. As an added bonus, superannuation funds generally enjoy a concessional tax environment under the current law, which makes property investment in superannuation funds tax attractive.
Asset Pooling Comes of Age - A Roadmap to Pooling Pension Assets
In the light of the economic crisis, pensions are now very much a boardroom issue, with CFOs looking to reduce pension risks and to control costs. For companies with pension plans in multiple countries, this is no easy undertaking. Due to the diversity of international pension regulations, companies have to run separate pension plans for every country in which they operate. This makes it difficult for them to gain a clear overview of their pension assets and liabilities (increasing risk) – and to take advantage of their international scale (increasing costs). In order to address these issues, a number of solutions have been developed in order to help companies to improve their international pensions management.
Big and Getting Bigger
Despite the effects of the 2008 financial crisis, the global retirement market is expected to grow by 66 per cent by 2020, representing an annual growth rate of 4.7 per cent. Total pension assets will increase from €22 trillion to €36 trillion, according to the August Allianz Demographic Pulse report.
Responsible investment in infrastructure
Azhar Abidi from Industry Funds Management, argues that when investing in long-term assets like infrastructure, investors need to ensure that they take into account all possible issues that these assets might face over time.
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