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INVESTMENT EDUCATION |
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Important Notice From 12 December 2007, the ‘Know Your Client’ (KYC) requirements of the Anti-Money Laundering and Counter Terrorism Financing Act ( The purpose of the At this stage there is no consistent policy in place for the fund management industry. Some fund managers may not accept any new business without the investor's identity being verified, whilst others are using a transition period to implement the new regulations. As a result additional identification documents may need to be provided with investment applications. Investors should check the instructions for completing application forms and any identity document requirements provided in the product disclosure statement. The complete AML/CTF form for individuals can be downloaded by here. Dec 2007 |
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ASIC Managed Funds CalculatorCompare different managed funds and the impact of management costs on your rates of return. The calculator works for most types of managed funds. It does not work for insurance bonds, friendly society bonds, similar ‘tax paid’ investments, or retirement income stream products. |
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Investment Goal Calculator This calculator helps to estimate whether or not you are on track to reaching your investment goal, taking into account your current savings plan and required investment period. |
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| • | Investors in Australia have traditionally overlooked and underinvested in agribusiness because of perceptions of high risk and poor returns. This paper investigates these perceptions and demonstrates that quite the reverse is true. |
| • | 26 years of data for Australian shares, Australian cash, Australian 10-year bonds, Australian listed property trusts, international shares and international bonds were compared against agribusiness as an investment. |
| • | The Top 25% of agribusiness can produce returns better than the All Ordinaries. |
| • | Returns from Top Agribusiness is substantially less volatile than the All Ordinaries. |
| • | Agribusiness is negatively correlated to other asset classes. |
| • | The addition of agribusiness to a portfolio can increase returns and substantially reduce volatility. |
| • | Well managed agribusiness is a sensible choice when considering diversification for a portfolio. |
How much super is enoughWhat kind of income would you like when you retire? Do you know how much super will provide that income? Will employer contributions be enough? Should you contribute more now?
Mortgage Funds - the income alternativeThe aim of any income fund is to provide regular earnings while protecting capital. Cash funds have been a popular income stream but this guide shows how mortgage funds are becoming increasingly popular to attain regular returns on investment.
The perils of market timingSpreading your investments around –or diversifying—is one of the best ways of reducing investment risk and improving your chances of achieving a more consistent investment return.
Why you shouldn't chase last year's returnsWe all want to pick a winner with our investments but chasing last year’s performance isn’t the way to go about it. Learn how to avoid common hazards and helpful alternative strategies.
The real value of investing internationallyInvesting in international shares can provide greater diversification, more exciting investment opportunities and stronger long-term performance than investing only in the Australian sharemarket.
Managed fundsOver nine million Australians have discovered the benefits of managed investments –one of the world’s fastest growing investment categories. Learn more about them in this guide.
Investing for low risk incomeNot all investments carry the same risk levels. Learn about typically stable investments like cash management funds, mortgage funds, term funds and fixed interest funds here.
Residential investment property or listed property trust?Australian investors are passionate about property as investments but tend to focus primarily on residential property. See the alternatives here.
Oxford Dictionary of Australian Investment Terms
Managed Investment Scheme
A type of investment vehicle that pools the assets of multiple investors into a single vehicle with a common investment objective and strategy. The investor’s interests..... Click here for more on this and other terms.
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mortgage acceleratory strategy (63kb) |
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mortgage reduction strategy (68kb) |
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mortgage elimination strategy |
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building wealth tax effectively (45kb) |
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capital gain tax management (49kb) |
When you invest in a fund, you are allocated a number of units in the fund. Each unit represents an equal part of the market value of the portfolio of investments held by the fund. The unit price is calculated by taking the total value of all of a fund’s assets on a particular day, adjusting for any liabilities, then dividing the net fund value by the total number of units held by all investors on that day. Click here to learn more.
Your choice of fund will also be affected by your investor profile, which is a combination of factors - your investment experience, your attitude to volatility, and your investment time frame.
How to get started
Understanding and explaining Options, Warrants & Futures
Interest Rate Market
Exchange Traded Funds
Find out share prices, company information and up coming floats.
The above information is supplied by the Australian Stock Exchange.
The Financial Literacy Foundation
: Understanding MoneyThe Financial Literacy Foundation has been established by the Australian Government to give all Australians the opportunity to better manage their money. The Foundation was launched on 6 June 2005.
The Understanding Money website offers a wide range of financial literacy information for people who want to find out more about managing their money. It has tools such as a budget planner, topics on money related issues and links to other useful websites.
A syndicated loan is a secured loan to a company which emanates from a banking or financial institution. Syndicated loans offer a floating rate of interest that is tied to a benchmark and is reset periodically (usually every three months).
In the US and Europe financial institutions remove loans from their balance sheets, primarily for capital adequacy reasons (unlike Australia where the banks often seek to maintain full relationships with their clients). This enables investors to participate in a syndicate of company loans. The loans are structured, arranged, and typically managed by one or more commercial or investment banks known as arrangers. The arranger raises investor dollars for a borrower in need of finance and is paid a fee by the borrower. As part of the loan syndicate, investors get full access to the company’s financial records. This can give investors more information regarding the investment target than is usually available to high yield bond investors, providing an extra degree of comfort.
Defining hedge funds can be difficult as there are many types of hedge funds that differ significantly from one another in terms of their investment objective, style, performance and risk characteristics. Essentially hedge fund managers invest in similar asset classes to those of traditional managers, but incorporate different skill based strategies which may include the following:
| • | Short selling a security in the expectation of it falling in value and buying it back for a lower price in the future |
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Use of leverage (or borrowing) to finance an investment |
| • | Use of derivatives such as options and futures, which may have similar effects to leverage |
The use of these strategies allows alternative managers to add value where traditional managers cannot. This is because traditional managers are typically not permitted to use short selling or to leverage their portfolios. Using alternative strategies enables hedge funds to target positive absolute returns, irrespective of a particular benchmark.
Other distinguishing features of hedge funds can include
| • | Incentive based remuneration whereby a performance fee is charged in addition to the management fee if the manager exceeds a certain level of outperformance |
| • | Fund managers invest a significant portion of their own wealth in the fund aligning their interests with that of investors |
| • | Limited liquidity that results in set time frames for investment or redemption of monies, eg. monthly or quarterly |
Hybrids are securities that may have aspects of both equity and fixed interest investments, offering a fixed or floating return over a set time frame with the option of converting to shares at maturity. These hybrids allow investors the opportunity to participate in the appreciation of the underlying shares, with the protection of receiving regular income.
Consider an example where $10,000 is invested in a hybrid security which pays income semi annually at a fixed rate of 6%pa for three years. The investor would receive $300 every six months ($600pa) until maturity, at which time the investor could choose to convert their investment into shares, rollover their investment (ie. stay invested in the hybrid) or receive their $10,000 back in cash.
Agribusiness Industry fact sheets (Timbercorp)
THE POPULARITY OF ALMONDSThe almond is a versatile nut, able to be consumed raw or processed in a variety of ways. In developed countries, including Australia, it is considered an important part of a healthy diet and in developing countries it is valued as an attractive source of protein. In some countries it has cultural significance and is associated with ceremonies and celebrations.
THE POPULARITY OF AVOCADOSAvocados are used predominantly as a fresh fruit. However avocados also have a wide variety of uses as a manufactured product, such as sushi and as the base ingredient for the much loved food product, guacamole. Avocado oil is also used in cosmetics and due to its high nutrient content has become a popular cooking oil and salad dressing. Avocados are No.1 in the “Top 10 Foods that are good for your heart” being sodium and cholesterol free. They have 60% more potassium than bananas and recent studies have shown that consumption of avocados increases your body’s ability to absorb heart-healthy and cancer fighting nutrients that are found in other vegetables.
THE PAPERLESS SOCIETY – AN URBAN MYTHIt was once thought that with the introduction of technologies such as the Internet and email, Australia would soon become a paperless society. This could not have been further from the truth. Studies have shown that the introduction of technology into a country dramatically increases the use of paper. Countries such as China and India which are experiencing strong growth in GDP, population, income and literacy levels, are seeing dramatic increases in paper consumption.
THE POPULARITY OF MANGOESThe mango is the second largest tropical fruit crop in the world, second only to bananas. This fruit, which is typically eaten fresh, can also be used for a variety of purposes that include canned fruit, juices, jellies, dehydrating and pulps that may be used in iced confectionery and yoghurts. Mangoes are even used in their un-ripened form for pickles and chutney.
THE POPULARITY OF OLIVE OILThe demand for olive oil has grown significantly in recent years, aided by the popularity of Mediterranean-style cuisine, in which olive oil is an important ingredient, and an increasing awareness of the health benefits of olive oil. Olive oil is an important part of a healthy diet. It contains a variety of valuable anti-oxidants that protect against cancers and its consumption can help reduce the level of total blood cholesterol. Olive oil is also beneficial for the stomach, hepato-bilary system, pancreas and intestines. It has anti-ageing properties and helps with osteoporosis, cognitive function and skin damage. Although it is mainly used in cooking, it is also consumed as a dip and as a salad dressing. Olive oil is also used in the manufacture of cosmetics. Careful marketing over recent times have raised the awareness of the health benefits of olive oil and dispelled a few mis-conceptions. For instance, the term ‘extra-light’ olive oil does not refer to the fat content of the oil, merely the taste and colour.
Zurich Investments, the funds management business of Zurich Australia, has released a white paper on the pitfalls of fund managers mimicking global benchmarks and how thematic investing fits into an international share portfolio.
Strategy of the month:
Payment of CGT LiabilitiesJim’s portfolio of managed funds has doubled from $175,000 to $350,000 since 2003 and he is concerned that “such gains cannot continue”.
Because Jim’s portfolio of managed funds has doubled from $175,000 to $350,000 since 2003 and he is concerned that “such gains cannot continue” he has indicated to you that he wants to reduce his exposure to the Australian share market and wants to “take some of the profits made in the last 3 years" and is still “happy to leave some in for the next person”.
Jim is best classified as an astute investor, cautious, but not conservative.
Want to learn how Jim invested next?
Budget tax changes:
A strategic timing opportunity for agribusiness!The May budget this year has created strategic timing opportunities for Australian investors to make the most of significant tax changes that will be introduced on 01 July 2006.
The most profound effect will be for tax payers in the $95,000 or more categories who currently pay some 47% tax (plus Medicare) on every dollar over the threshold. From 01 July an income earner will have to earn an additional 58% MORE income to be included in the top tax bracket, which in itself has been reduced to 45% and starts at the massive $150,001.
The Australian Financial Review reported that just ‘the Top 2% of wage earners, those who earn over $150,000 a year, will pay the new top marginal rate of 45c in every dollar'.
The implication for potential agribusiness growers is to optimise their investment positions prior to 30 June to make good use of the available tax deductions afforded to Growers in the various projects prior to 30 June as when the income is received in future years the Grower most likely will be in a lower tax bracket, simply due to legislative change!
Top 10 Golden Rules Of Agribusiness
The Australian Agribusiness Group (AAG) has released its “top 10 golden rules” of agribusiness to consider before making any investment decisions.