Will COVID-19 kill the balanced option?BY ELIZABETH MCARTHUR | THURSDAY, 9 APR 2020 3:54PMAs consumers saw their superannuation balances nosedive when the COVID-19 pandemic began wreaking havoc on the market many were surprised to learn their retirement savings weren't quite as safe as they thought, reigniting the debate around 'balanced' investment options.
Upgrade your subscription to access this articleAnd gain access to:
And moreRead our full COVID-19 news coverage and analysis here. Related News |
Editor's Choice
Australian Retirement Trust people chief to depart
Australian Retirement Trust has confirmed the departure of chief people officer Helen Jackson, who will leave at the end of the financial year.
SSGA loses $2.4bn in two months
State Street Global Advisors (SSGA) suffered $2.4 billion in net outflows over the last two months of 2023, the majority of which hit its Australian and international equities products.
AFCA seeks industry feedback on approaches
The financial complaints authority is asking the industry for feedback on how it approaches issues and reaches decisions.
Apex, ACA partner to broaden client services
Apex Group and ACA Group have formed a partnership to offer their clients a wider range of services.
Further Reading
Sponsored by | Know the facts about lifetime annuitiesSaving for a happy retirement is Australia's #1 financial goal. Learn how LifeIncome can deliver more income, certainty, & choice. |
Products
Featured Profile
Jason Huljich
JOINT CHIEF EXECUTIVE OFFICER
CENTURIA CAPITAL LIMITED
CENTURIA CAPITAL LIMITED
A single decision can change your life, and that's exactly what Centuria Capital joint chief executive Jason Huljich learned when he came to Australia in the 1990s. Eliza Bavin writes.
Oh dear, here we go again. May the Good Lord preserve us from experts - especially the eloquent and those in ASIC and APRA.
'Balanced'? How did we come to use a nebulous term like that. Surely all funds are balanced, but differently. Or do we mean some are 'unbalanced'? In short, the term is meaningless.
And 'conservative'! Shouldn't all life savings be invested conservatively? But, then again, what does conservative investment mean? Different things to different people, and different things according to its purpose. Advisers, of course, need to be wary of ASIC's cast-iron interpretation!
Then there's 'growth'! Growth of what? Yes, yes - of course - interpreted and bandied about by all and sundry to mean growth in market values - the quantum. And how successful has chasing growth in market values been? The All Ords today stands where it stood 14 years ago!
And what if - as should be the case with all who are retired, and arguably those saving for their retirement - you are investing to grow your Income Stream! (Then again, SuperFunds - to their shame - don't disclose Income in their 'Change in Value' reporting. Why? Because they're chasing Growth, presumably. Oh dear.)
Then there's good old 'defensive'! Defence against what? Of course: the V-word! (Volatility, that is, not Virus.) And of course, for the growth chasers (read Analysts, Strategists - aka Speculators, Gamblers), it means that proportion that you invest in non-growth assets; effectively, that proportion you don't invest. Because you're scared of volatility. (Not loss, mind you: just volatility.)
No wonder we have a whole industry in disarray! We neither agree on what we are talking about, nor agree on the meaning of the terminology we use to talk about it!
Imagine the state of the medical profession in similar state
Post script
I am, by nature, education and experience, a conservative investor. My own funds are conservatively balanced, mainly in good old-fashioned Australian 'blue chip' Industrials, other than for a small Cash reserve.
Why? Because, firstly, I like their defensive quality of generating a consistent, reliable and growing income-stream. And secondly, because I'm not prepared to stake my financial security - the security of my retirement income - on speculative capital growth. And I don't have to be concerned with the V-word.
So, ASIC, how do you rate my risk profile?