New Perennial investor index
Brian Thomas
Perennial Investment Partners has launched the Perennial Investors Index, which gives retail investors a benchmark to compare returns over monthly and longer periods.
According to Brian Thomas, head of retail funds management at Perennial: “We found that investors were quite confused by the huge amount of investment information that they were seeing every day, so we constructed a simple index”.
He explained that it covers typical asset allocations of conservative, growth and high growth investors, factoring in an allowance of 1 per cent per annum for investment fees in order to make it more reflective of pre-tax returns.
Specifically, the index comprises Australian shares, listed property, fixed interest and cash, along with their global counterparts of shares, property and fixed interest.
Thomas said the index is designed to summarise the vast amount of information available to investors into a more easy to understand framework, which is available within the first week of each month.
“I don’t think there’s anything else that quite gives investors the feel for how things are going so early in the month. It puts it all into context,” he said.
In April so far, growth and high growth investors have made up many of the losses incurred towards the end of February and early March. Growth investors achieved a return of 0.59 per cent for the month of March.
“While that is not a great return, it really does illustrate the value of portfolio diversification in that the negative returns from international equities were offset by Australian equities exposure for the month,” Thomas said.
Pointing to the index covering the 12 months to February 2007, he said it shows how investors have done quite well in the past year, with average returns of 10.48 per cent.
“Whilst equity market falls can be dramatic from a daily perspective, a yearly or longer view gives a much better indication of the benefits of a diversified approach to investing.”
Despite some fluctuation in the market, over the longer term investors are still well ahead, with an average investment return of 15.19 per cent over the past four years.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
