News Round Up
Economic recovery in most challenging stage;Bills to rebuild investor confidence pass first reading; Diversified's balanced fund ranked 1st by FundSource; Cost of NZ Super less alarming; Investors disadvantaged by developed market focus.
Monday, September 27th 2010, 7:36AM
Economic recovery in most challenging stage
The developed-world economic recovery has entered its most challenging stage according to the AXA quarterly strategic outlook
It says the transition from an inventory cycle and stimulus driven recovery to one that now relies on the strength of final private demand.
It says that is proving to be hard work for countries such as the United States, although AXA believes fears of a double-dip recession and deflation are overdone.
Bills to rebuild investor confidence pass first reading
The Financial Markets (Regulators and KiwiSaver) Bill and the Auditor Regulation and External Reporting Bill both passed their first reading in Parliament last Thursday.
The bills have been referred to the Commerce Select Committee for further consideration and are expected to be reported back to Parliament early next year.
Diversified's balanced fund ranked 1st by FundSource
Diversified Wealth management has had its Balanced Fund ranked first by FundSource for one, two, three, four and five years.
In an update Diversified Wealth management says August proved to be a very satisfactory month for those fully invested and despite share market volatility the year is unfolding as a satisfactory one for returns.
Investors disadvantaged by developed market focus
Institutional investors are limiting returns and retaining unnecessary risks in their equity portfolios by continuing to bias investment towards developed economies, says Mercer.
It is calling on institutional investors to carry out a fundamental review of their equity portfolios to ensure they remain "fit for purpose" in the economic landscape post the financial crisis.
Mercer says the continued strong growth in developing countries with favourable features such as young and expanding populations is not being captured adequately by many investors. A strong bias is still evident towards countries suffering from structural disadvantages such as excessive public debt burdens and weak bank lending.
Cost of NZ Super less alarming
The Retirement Policy and Research Centre (RPRC) has found the expected cost of New Zealand Superannuation (NZS) is, perhaps, less alarming than many suggest.
In 2000, the Long Term Fiscal Models(LTFMs) expected that NZS would cost about a net 8.8% of GDP by 2050.
The latest (2009) LTFM shows that the net cost in 2050 is now expected to be 6.7% of estimated GDP.
The RPRC's report shows that this is due mainly to upward revisions of the estimates of GDP.
The expected cost of NZS will still about double from today's cost because the size of the population over the current state pension age will also about double.
| « [Weekly Wrap] Time running out for AFAs | KiwiSaver mismatch a 'huge challenge' for advisers » |
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