Cash giving way to other allocations
Money is starting to move out of term deposits and other cash deposits into equities and bonds, according to Equity Trustees head of corporate fiduciary and financial services, Harvey Kalman.
Kalman said this was, in part, responsible for the funds under management (FUM) in the Pimco EQT retail bond funds increasing by over $1 billion, with $820 million of that amount representing net inflows.
"We see three main sources for these substantial inflows," he said. "Investors getting out of term deposits; a switch from passive to active managers; and a rebalancing out of model portfolios.
"It also helped that the PIMCO EQT Global Bond Fund delivered returns of over 14 per cent in 2012, while the PIMCO EQT Australian Bond Fund returned 8.6 per cent," Kalman said.
He said falling domestic interest rates during the year had clearly been a factor, focusing investors' minds on the need for alternatives to cash products.
"At the same time, financial planners have clearly done a terrific job in getting clients to understand the benefits of diversification in their portfolio," Kalman said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
