Investing After The GFC

Fixed interest markets are not what we knew 10 years ago. Today’s markets are regulated and managers can now pick from a wider range of investments, which is good news for the everyday investor, explains Harbour’s Mark Brown.

In the 10 years since the GFC, a quiet revolution has been taking place in the fixed interest market with implications for mum and dad investors. As a result, New Zealand investments are better regulated, thanks to the launch of the Financial Markets Authority, and fund managers now give investors more choice than ever before.

Dial back a decade and savings were predominantly channelled into term deposits and precarious finance companies. Today, the broader range of low risk investments available has given managers opportunities to innovate, says Harbour Asset Management’s Mark Brown.

“Term deposit rates have come right down to 3% or less, which creates a challenge for ordinary Kiwis who need income,” says Brown.

As a result, managers such as Harbour have launched newstyle diversified income funds where investors can receive more in their hand than they could from a term deposit, with a fraction of the risk of the finance companies of old.