The only investment certainty over the past four years has been uncertainty.
Investors have been taken on an eye-watering, nerve-jangling roller coaster ride with markets rising and falling hither, thither and yon.
It’s been all too much for many investors, who along the way have chosen to disembark while others have stayed the course. Others still have jumped off and back on several times along the way.
For those lucky investors residing in countries with relatively high-interest rates (Australia, Brazil etc.) many have simply sat on the sideline and taken the reasonable returns offered from cash and some fixed interest products while the calamity in the market played out… though in Brazil’s case the cash rate is undone by the higher rate of inflation).
The problem was it was never clear when the madness had ended… or even if it has, despite the stellar start to 2012.
Unfortunately, in the US, UK, and many European markets there has been no such safe haven or Plan B as it were.
Arguably this has been partly responsible for creating new opportunities for asset managers.
The fact investors have not been able to sit on the sideline in these markets without standing completely still, creeping backward or at best moving forward at barely a glacial pace (some cash savings rates are a miserly 0.25%) means asset managers have been able to coax investors back into the market.
The low cash rate may explain one reason for the seeming explosion of risk-adjusted offers hitting the market over the past few years (or at least being heavily promoted now) but also fund managers were forced to react as redemptions saw millions upon millions of fee generating assets walk out of the door.
The volatile swaying of markets has led many investment managers to bring to market, or simply promote existing products with much more gusto, a whole variety of so-called risk-adjusted offers.
The downside of this so-called explosion of products is the added layer of new terminology investors need to squeeze into their vernacular.
Products are now referenced as being… durable portfolios, providing risk-adjusted returns, tactical asset allocation, multi-asset, absolute return, fund of ETFs, diversified, low correlation etc.
Does this make life any simpler for investors? This burningpants scribe doesn’t think so.
More jargon (i.e. marketing bumf) means more confusion – and most investors already struggle with just the basics to even begin.
In the UK the Investment Management Association (IMA) thought it would get in on the act this year by removing what appeared to be straight forward sounding funds for something a little more convoluted.
Cautious, Balanced and Active managed funds no longer exist in the IMA’s categorisations, instead, we now have Mixed Investment (20-60% shares), Mixed Investment (40-85% shares) and Flexible Investment.
“Oh, and while we’re at it, let’s throw in Mixed Investment (0-35% shares) and Global Equity Income,” one can imagine the IMA remarking.
The industry is often guilty of over-engineering – though in its defence the Government often adds its own layer of mandated confusion.
But in this day and age of low trust, surely uncluttering would be the way forward, not the reverse. payday loan частный займ без предоплатзайм под 0 на картубыстрый займ на карту без отказа