Investors deserve clearer insights
It is disappointing that a decade after the global financial crisis, New Zealanders continue to remain vulnerable because of the rules around risk indicators.
This is especially the case for bond investors, who are often conservative in nature and consider fixed interest a safe haven in times of volatility.
Unfortunately, after a decade of low interest rates, bond investors are also prone to “reaching” for higher yields, sometimes without understanding the risk they are taking. This is when risk indicators play a vital role – by helping New Zealanders understand how risky their “income” product is.
Given this backdrop, should a portfolio whose largest investment, comprising approximately a fifth of the fund, is an off-market, related party, private loan to a portfolio of shares, be given the same risk indicator as a term deposit from a major Australasian bank?
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