Above the benchmark:
How indexing has grown up

Vanguard Group founder John C. Bogle in 2014

Passive products are on track to break another benchmark record this year in a move that could see indexers take majority control of the US equities fund market.

According to a late 2018 Bloomberg report, data from research house Morningstar shows passive US share funds grew market share from 45.7 per cent in November 2017 to 48.1 per cent 12 months later.

“They’ll top 50 percent in 2019 […]

Swimming lessons from McDuck – Why custody shouldn’t be a mystery

Scrooge McDuck loved to splash with cash, swimming solo in the deep, impregnable bank vault that housed his money.

The famous image of McDuck diving into his millions is typically interpreted as greed cartoonified.
But the loaded old duck had his reasons.

As the second-richest fictional character of all time – worth US$33.5 billion, according to Forbes magazine – McDuck clearly put a high value on two of the most important features of money: liquidity and […]

Sober investing tips – How to handle volatility

Sober investing tips: how to handle volatility

InvestNow members are generally glass half-full types.

Looking back at the last quarter of 2018, over 90 per cent of investors didn’t spill a drop as share markets served up another round of volatility; about a third of InvestNow members even took the opportunity to top up their portfolios as equities staggered downwards.

But if October left investors stirred, not shaken, the final two months of 2018 threatened to tip them off-balance. The last month of the […]

Going global – Tax tips and traps for local investors

Kiwis like their offshore travel.
According to the latest data from Statistics NZ, almost 264,000 New Zealanders jetted overseas during October 2017 – up about 33,000 compared to the previous October and close to 100,000 above the figure for the same month in 2007.

Perhaps that familiarity with the foreign is why Kiwis are also happy enough to ship their money to global destinations, unaccompanied. Figures from the Reserve Bank of NZ (RBNZ) show the wholesale managed funds market consisted of […]

People invest for all manner of reasons but their goals can be boiled down to just two: income or growth.

In practice, of course, most investors will want a mix of both income and growth in proportions according to their risk appetite and specific life situation.

Growth assets tend to be ‘riskier’ investments such as shares while NZ investors have historically derived much of their income from the ‘safe’ haven of bank term deposits (TDs).

But the division between ‘income’ and ‘growth’ assets is […]

Before 2007 fund investors in NZ were served up the financial equivalent of meatloaf: returns and tax were baked together into one unappetising lump according to the antiquated legislative recipe of the day.

Unsurprisingly, in those dark days many retail investors preferred home-made direct portfolios of shares and fixed interest assets over the uniform concoction of meat and sawdust dished up by the tax-challenged managed fund industry.

But in 2007 the Labour government rewrote the fund tax recipe […]

As InvestNow founder, Anthony Edmonds, explained last month, mapping out your destination by working out your strategic asset allocation (SAA) is the first – and most important – step in planning an investment journey.

While an investor’s SAA helps describe the route, end-point and comfort levels of the proposed trip, an investor has to ultimately choose between different investment vehicles to translate their plan into action.

“Many investors are happy enough taking the bus; others might prefer to drive a car themselves,” Edmonds says. “Or for the thrill-seekers there’s always a motorbike.”

For […]

PIEs and PIE tax – your questions answered

Article by InvestNow

The disclaimer

The following are a few of the more common questions our customers ask us about PIE funds and PIE tax.  This post does not constitute a warranty or advice. You should seek independent professional advice on investments, tax, legal and accounting matters.

What is a PIE?

A portfolio investment entity (PIE) fund is a type of New Zealand managed fund that invests the contributions from investors in […]

It appears that a great way to get some Kiwi investors to love an investment fund is to make it an “ETF”, which is short for Exchange Traded Fund.

Since the launch of the first ETF, the S&P 500 ETF (SPY) back in 1993, ETFs have seen tremendous growth globally ($4.5 trillion as at Sept ’17 – source ETFGI.com).

In the US market, where the investment industry has been built around using the stock exchange as the infrastructure for delivering investment solutions to […]