“When conditions improve and speculation increases in one market it is not uncommon for investors to shift their funds from the market that is underperforming, or at least expected to underperform, to the market that is expected to outperform.”
It says the two markets were not related prior to 2000 but became inversely related after this time.
“Prior to 2000, retail fund inflows appear to be positively correlated. However, after 2000, investors began to increasingly shift their funds into the property market and away from the retail funds market, resulting in a negative correlation.
“The timing of this switch is interesting as it coincided with the introduction of widespread tax reforms including the effective halving of the capital gains tax rate, reduction in company tax and the introduction of the first home-buyers scheme.”
Tower completes PrefSure buy
David Callander, formerly head of the Tower Australian Life business is now chief executive retail life; Geoff Black formerly the managing director of PrefSure is chief executive alliances and group risk and Grahame Evans remains as chief executive investments.
Tower group managing director Jim Minto says the merged company would be a market leader in life insurance in Australia.
Comment: April Fools Day 2007 no joke
For two days during this past week I have chaired the annual Super Summit that looks at superannuation issues.
One of the benefits of chairing this conference over the years is that it provides a good reality check on superannuation and what current thinking is. Not unsurprisingly the two big issues were KiwiSaver and tax. [MORE]
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