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Equities the asset class to watch

Tuesday 28th of July 2009

Wong said shares continue to be very attractive in comparison to cash and bonds. However, New Zealand equities remained a "low beta" market, with much more upside potential in global equities.

"Domestically, the New Zealand sharemarket has already bounced off its lows, reflecting expectations of better growth ahead and this positive trend should continue. However, New Zealand shares are relatively expensive compared to global counterparts and therefore offer less upside in a world of better return opportunities," Wong said.

This was because New Zealand had not felt the recession as severely as some nations around the globe and therefore it did not offer as much value. AMP Capital currently holds overweight portfolio positions particularly in global equities (around 5%), as well as in domestic fixed interest, property and foreign currency. It is neutral on New Zealand equities and underweight cash, global fixed interest and global property.

In the near term, bond yields could remain in the trading range, with the tough economic environment and low short rates limiting the upside, Wong said.

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Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
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Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.
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FMA outlines its latest expectations for advisers
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To correct errors in my previous post: "policies, templates, and controls" should read "policies, processes, systems and controls", and "is more conductive" should read "is more conducive".
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