Superannuation Update
Treasurer Swan and Superannuation Minister Shorten must have been well aware of the potential electoral backlash from major changes to superannuation judging by their announcement today, a month out from the budget. Although the changes will affect those on the top tax bracket, they are not nearly as ferocious as many, yours truly included, were expecting.
Few comments seen so far have been negative. A 15% tax rate on retirement incomes over $100,000 remains attractive, even if not as generous as zero % on everything. Generally speaking the changes seem to pass the "fair and reasonable" test, although they won't do much to fill Swan's budget problems, nor the government's electoral chances if it comes to that. Maybe it was the realisation that if they tinkered too much with everyone else's retirement incomes it might put too much focus on their own overly generous pension arrangements.
And so back to markets and fund performance. March was only the second negative month for the ASX200 since December 2011, ending a significant rally since last July of almost 25% during which risk averse absolute return funds underperformed, and the more concentrated long biased funds made up some of the ground lost in the previous three or four years. Early indications from funds that have reported March results indicate they have performed well, with positive returns confirming their value in negative markets.
Meanwhile the Japanese market continues to rally, now at a four and a half year high and 57% above the low hit in late July, while the Yen continues to weaken, as intended by their version of QE1, 2 and 3. Other Asian economies and markets may not be so happy about that, but may have to grin and bear it.
On that happy note, I wish you a happy, healthy and carefree week end.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
Meet the Manager
Due to an overwhelming response, our Wednesday 10 April Meet the Manager briefing with Insync Fund Managers is fully booked. We will be holding a second briefing for Insync and will release our next Fund Manager lunch briefing soon. Stay tuned for updates.
