Did you know... bonds take a nosedive
Did you know.... Bonds take a nosedive
The old insurance bond is looking a bit sad and drab these days and in the wake of bold new performers in other sectors, it's a wonder they haven't been pen-sioned off altogether.
Did you know.... Bonds take a nosedive
The old insurance bond is looking a bit sad and drab these days and in the wake of bold new performers in other sectors, it's a wonder they haven't been pen-sioned off altogether.
Bonds haven't been doing so well since changes to the tax environment about three or four years ago. They've been in decline and have never been actively sold since, although it's fair to say they have never actually died.
AMP is a clear market leader, with almost $1.2 billion in bonds in the quarter ending September 1999. Mercantile Mutual takes the silver medal with $988 mil-lion, up on previous figures - largely as a result of a strategy Paul Resnik worked out for them. Resnik came up with a paper last year that said insurance bonds are better than unit trusts from a tax perspective.
ANZ comes in at number five with almost $565 million - although there's no fun-damental reason why they should be up with the big boys. It may simply be a function of holding their own in a declining market or perhaps a movement of new funds inflow.
It will be interesting to see whether the sector improves as interest rates rise and whether the new tax regime will make them attractive again.
Table:
Insurance Bonds - September 1999 ($millions)
Company Insurance Bonds
AMP 1,165
Mercantile Mutual 988
LendLease 715
Colonial 710
ANZ 565
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
