Investment horizon: The changing face of the New Zealand credit market
The borderline between bank lending and fund management is becoming blurred. Fund managers are stepping into areas traditionally dominated by banks, as regulatory reform has imposed higher capital costs on banks.
Fund managers are broadening their investment choices and the range of bonds issued has become more varied.
There is also significant innovation via peer-to-peer lending. Greater disclosure is enabling deeper analysis of fixed interest funds. All these trends provide plenty for investors to digest. While the public focus on fees has some merit, a much richer conversation is overdue.
The genesis for change came from both domestic and international sources. The collapse of finance companies in New Zealand through 2008 and the subsequent GFC prompted two key initiatives in New Zealand.
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