Australian investors ready for low-cost active funds
Australian investors should be offered more opportunities to access low-cost active funds which are expected to help them drive down the costs, according to Vanguard.
Vanguard’s Australia head of intermediary distribution, Matt Willis, told the financial advisers attending Vanguard’s national roadshow events: “We believe there is a clear opportunity to offer Australian investors genuine low-cost, high-quality active funds”.
He added that recent research showed that “the lower the investment cost, the higher the chance of success foe the investor, regardless of investment style”.
Vanguard’s global chief economist, Joseph Davis, said one of the options to help improve investors’ chances of generating their ‘investments numbers’ over the next five years, given the forecast increased volatility, would be decreasing investment costs.
According to him, volatility would increase over the next two years and returns seen over the last five years would not be within reach.
“In my mind, the investment numbers for the next five years are going to be more challenging than they have been for the previous five, despite the fact that we are seven years into the global economic recovery,” he said.
“I can tell you that for the next five years the financial market returns that we are anticipating for all asset classes globally are the most guarded that we have generated since 2006, though not at the low level we were anticipating at that time.”
Davis also stressed that one of the most prominent trends with significant implications for the future growth of financial markets and investment returns would be the pace of technological change across industries.
He said that this would be the bigger disrupter to the nature of employment globally rather than growing free-trade and globalisation.
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