I have always been of the view that politicians, and probably prime ministers in particular, should fade gracefully from the public eye on retirement, and just be happy with their generous entitlements, and excessively generous travel benefits.
My view is normally compounded whenever I hear Malcolm Fraser holding forth on what should be done by the current government. Having secured the largest majority (55) in federal history in 1975, and the second largest (48) in 1977 at the following election it is often argued that he did little with either prior to losing office in 1983. Notwithstanding that, and inexplicably losing his trousers in Memphis in 1986, he continues to snipe from the sidelines, well into his eighties, some thirty years later.
There are exceptions of course for exceptional PM's, and although Paul Keating has been known to air his views liberally, one has to take notice when he's commentating on Australia's superannuation system, of which he was the architect. So his comments on the ABC's Lateline program this week on superannuation, the pension age, and the need for a Commonwealth insurance scheme for those who live between 80 and 100 are such an exception.
That interview is 24 minutes long and might be beyond the time limits of our readers, so this brief two minute excerpt from the Guardian.com might give you a flavour. In essence Paul Keating makes eminent sense. Not only did he call for an increase in the superannuation guarantee levy to 12% (in reality it probably needs to be 15%), but he also argues against the current call by Treasury and others for a reduction in the taxation benefits of super contributions.
Keating argues that a large majority of the population will not retire with a large nest egg, and that this will be the domain of those relative few with sufficient foresight and fortune to be able to make additional (tax friendly) contributions. His argument that they should be encouraged, rather than discouraged, stems from his belief that whilst it might be a benefit for the better off, at least it is producing an overall benefit to the economy by reducing their dependence on the system in later life.
More radical however is his proposal to have a national insurance scheme for those over 80. I have heard it quoted that 50% of the children born today are likely to reach 100, and no matter how high the current Treasurer wants to make the retirement age, the demographics of longevity, and the cost to the system, are massive. While not necessarily being the greatest fan of Keating when he was in office, it is hard to fault his logic, or his vision.
The reality is that for the majority of the population a 9% contribution by their employer to superannuation will simply not be sufficient to replace their dependence on welfare when they retire. Hence the attractiveness of not only making additional contributions, but also establishing a Self Managed Super Fund in an attempt to have some degree of control and independence over their financial affairs in retirement. It is little wonder therefore that many such self-directed retirees are supporters and investors in absolute return funds.
And on a slightly different Paul Keating note, one of my favourite little books, published way back in 1992 is a small paperback compiled by a Bookman Press containing 96 pages entitled "Paul Keating's Book of Insults". It's a gem, the colour and shape of a banana in memory of Keating's famous Banana Republic comment. I'm sure the current Speaker of the house Bronwyn Bishop would not have let him get away with many of his Parliamentary insults, but they still raise a chuckle.
Specific results received this week include the following PERFORMANCE and NEWS UPDATES:
The Monash Absolute Investment Fund returned -1.3% in a volatile equity market. The Fund's 12 month record is strong at 24.77% with a vol of 9.11%.
In its fourth month of operation, and in a choppy equity market, Bennelong's Alpha 200 Fund returned -0.57% during April.
Updated FUND REVIEWS released this week included:
Insync's Global Titans Fund shows the Fund delivering an annualised return of 10.36% and annualised standard deviation of 8.53% (since inception in October 2009) with sound risk-reward statistics.
Morphic Global Opportunities Fund - returned an annual return of 27.63%. Morphic's philosophy is that only funds with flexible investment and hedging strategies will be able to deliver acceptable, steady, real, absolute returns over the investment cycle.
Supervised Investments High Yield Fund is characterised by positive returns and very low risk. Since inception (April 2009) the Fund has returned 11.16% pa with a volatility of 2.22%.
19-20 May in Sydney, IBR Conferences presents the Unit Pricing Forum. This is a 2 days forum exploring Unit Pricing operational challenges for 2014 & beyond. Topics include new APRA reporting requirements & implementation; impacts on unit pricing reporting and more.
Wednesday 21 May in Sydney: The Hedge Fund Association, in conjunction with Pricewaterhouse Coopers, is pleased to present an update on key regulatory matters currently affecting the alternative investment industry. A panel of Pricewaterhouse Coopers senior executives will provide a detailed overview of topics, as well as allowing for questions and commentary from attendees.
28-30 May 2014 in Sydney: IBR Conferences presents the Asset Allocation Conference. This event has been designed to both update and educate investors by taking an in-depth look at these more adaptive asset allocation strategies and practices and where the best opportunities for high return lay in the current climate.
If you would like your Event listed in our calendar, please contact us.
And now for something completely different this week, while we talk of our politicians, at least most of us know if our previous leaders are dead or alive. Unlike these Americans.
On that note, I hope you have a safe and happy weekend.
Best wishes,
Chris
CEO, AUSTRALIAN FUND MONITORS
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Last weekend one of our staff members participated in the Sutherland Shire 24 hour Relay for Life and walked a marathon to raise money for her team (Netty Girls) in memory of family members who have died from cancer. Click here to make a donation or watch a short video to see what all the fuss is about.
1 in 2 Australians will be diagnosed with cancer before the age of 85. All money raised through Relay For Life makes a difference in helping fund Cancer Council's critical research, prevention, education and support services. Relay For Life is a fun, outdoor overnight fundraising event that brings communities together to celebrate and remember the lives of those who have battled cancer. Teams take turns to walk or run around a track whilst enjoying entertainment, activities and heartfelt ceremonies.
