Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Public Trust Recommends Investors Review Strategy

Investment Advisory: Public Trust Recommends Investors Review Their Strategy

Rising interest rates and rapid growth in the world’s economies will change the investment environment over the coming quarters, according to Public Trust Investment Funds Manager Colin Thomson.

“Instead of having to deal with shrinking growth and the danger of falling prices, investors will need to consider the implications of rapid growth and the risk of a sharp rise in inflation,” Mr Thomson said.

“If central banks have to raise interest rates significantly to contain inflation, it could affect investors’ returns, as higher interest rates can cause share and bond values to fall.”

Mr Thomson recommends that in light of these changing circumstances investors review their investment strategy.

“Investors who took our advice and held on to their multi-sector fund investments despite previous gloomy news have been rewarded over the last few quarters with near record returns.

“But the markets never stand still. With world economies recovering and inflation rising it is likely that interest rates will also rise. And when rates rise, bond capital values and share prices tend to retreat.

“For investors, this means that returns from multi-sector funds are not likely to be as high as they have been over the past year. The markets may also be more volatile – moving up or down in response to changes in interest rates as the central banks try to control inflation,” Mr Thomson said.

Public Trust believes that investors who rely on their investments for regular income may need to be more cautious in their approach over the coming quarters. Higher returns may be provided at the risk of lower capital values. Furthermore, investors who wish to achieve the same level of growth in their investments may have to increase their risk in order to do so.

“It’s important to regularly review your investment strategy. First, to make sure that your investment portfolio still suits your circumstances and second, to make sure that the future expected returns and risks are still acceptable.

“We believe that the changing environment presents a strong reason for investors to reassess their risk profile and make the appropriate adjustments to their managed fund portfolios,” Mr Thomson said.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>

ALSO:

Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>

ALSO:

RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>

ALSO:

ScoopPro: Helping PR Professionals Get More Out Of Scoop

Scoop.co.nz has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>

ALSO: