tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, December 3rd, 6:36PM

News

rss
Latest Headlines

Many Kiwis missing out

Many New Zealand investors are missing out on a growing part of the world markets because their porfolios are America-centric, Diversified's investment analyst Norman Stacy says.

Wednesday, December 3rd 2003, 7:12AM

Yet many New Zealand investors are missing out on a growing part of the world sharemarket because they systematically omit China from their consideration, Diversified's investment analyst Norman Stacy says.

"This First World bias arises not from economics, but when global spread is proportional to the total value of only selected sharemarkets. Even among these developed countries, distortion is material," he says in his latest economic and market report.

Usual Kiwi allocation

Country / region

Economic rank

10.7%

U.K.

5.9%

17.8%

Rest of Europe

29.3%

9.5%

Japan

19.1%

3.1%

Rest of Asia/Pac.

3.1%

58.8%

North America

42.6%


(Source MSCI Indices @ Sept 30th, 2003).

"The result is many institutions and investors America-centric. Whilst the United States economy will continue to be vitally important globally, over-emphasis risks missing other opportunities."

Stacy uses material from the International Bank Credit Analyst and the International Monetary Fund to estimate the true relative importance of global regions (see table below).

The calculations are based on the purchasing value of money, rather than volatile, official exchange rates.

"Estimates of relative contribution to global growth between 1995 and 2002 are revealing," he says.

Global Economic Ranking


 

Share of Global Economy

Growth attributable to

USA

21%

20%

Euro Union

20%

14%

Japan

7%

2%

China

13%

25%

Other Asia

10%

13%

Other Western

8%

5%

Rest of World

21%

21%


(Source IBCA Nov. 2003)

"The major point is that Asia including China, is already of similar economic size to Europe or USA, and with arguably greater impact on growth. "

He says that Diversified’s model strategies have long recognised the frailty of a Morgan Stanley Capital International world market capitalisation-based approach to global economics, and include emerging markets, Asia specialists and other specialties in a balance to more closely approximate the purchasing power parity adjusted, global spread.

While China looks attractive it is not without risks, Stacy says. "Chief among these is the reliance of a totalitarian regime, to manage and eventually be subsumed by, rampant, market-led growth. Reciprocally, that the levels of growth projected for the United States can be achieved and sustained, is also conjectural.

"Diversified’s strategy models also reflect that global economic risks have diminished, with the emergence of Asia including China, as a global growth driver to supplement the USA.

"Meanwhile Europe’s fragile recovery is gaining legs, and the prospect of synchronous global growth must now be considered the greater probability," he says.

« AMP plans to build its advice-based distributionSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Partners kills its matrix
    “Partners Life has decided to stop using its COM for advisers as it believes the system may breach the CoFI regulations which...”
    16 hours ago by Amused
  • Partners kills its matrix
    “Insurance companies should stick to their lane. They are not advisers and even those that employ advisers should not be crossing...”
    19 hours ago by Tash
  • [GRTV] The nitty gritty of Smart’s ETFs
    “Advisors should consider all gateways into investment markets including cheaply priced ETFs to provide access to low priced...”
    22 hours ago by Pragmatic
  • DRS member or not - client care remains advisers’ responsibility
    “FAPs are members of DRS too. Substitute “adviser” for “FAP” and the story is actually a lot more accurate. If...”
    2 days ago by Aggressively_passive
  • Partners kills its matrix
    “COM has no relationship to CoFI, never did. It was self indulgent and a tiny overstep. Great way to finally weed out possible...”
    2 days ago by Backstage
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build ▼4.94 - - -
AIA - Go Home Loans ▼7.49 ▼5.79 ▼5.49 ▼5.59
ANZ ▼7.39 ▼6.39 ▼6.19 ▼6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼5.79 ▼5.59 ▼5.59
ASB Bank ▼7.39 ▼5.79 ▼5.49 ▼5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance ▼7.90 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One ▼7.54 - - -
BNZ - Rapid Repay ▼7.54 - - -
BNZ - Std ▼7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney ▼7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ ▼6.95 ▼5.79 ▼5.59 5.69
Co-operative Bank - Standard ▼6.95 ▼6.29 ▼6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - ▼5.99 ▼5.89 -
First Credit Union Standard ▼7.99 ▼6.69 ▼6.39 -
Heartland Bank - Online ▼6.99 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 ▼6.65 6.40 -
ICBC 7.49 ▼5.79 ▼5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank ▼7.25 6.89 6.59 6.49
Kiwibank - Offset ▼7.25 - - -
Kiwibank Special ▼7.25 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society ▼7.94 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank ▼7.49 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo ▼4.94 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank ▼8.19 6.49 6.49 6.49
TSB Special ▼7.39 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac ▼7.39 ▼6.39 ▼6.09 ▼6.19
Westpac Choices Everyday ▼7.49 - - -
Westpac Offset ▼7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - ▼5.79 ▼5.49 ▼5.59
Median 7.49 5.99 5.79 5.69

Last updated: 3 December 2024 9:25am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com