The creation of an alternative asset class

Published in: FS Super
Author: Alan Greenstein, Zagga
Date: July 2017

Why Australians need a new approach to income investments

The Australian investment market of 2017 is rapidly evolving.

Low interest rates and global monetary policy have pushed yields to record lows. Property prices have reached “bubbly” proportions in many locations. Exchange-traded funds (ETFs) and listed investment companies (LICs) are attracting fans for their lower fees and higher liquidity. More Australians are eschewing the confines of a pooled superannuation and going it alone.

And against this backdrop, a wave of baby boomers reaching retirement age is creating huge demand for income-producing assets.

How will the investment industry respond to these trends? How will it meet the demand for transparency, control and income that today’s sophisticated investors demand? And what are the risks to the system, to the industry and to individuals if they don’t?

This paper explores a number of trends among self-directed and wholesale / sophisticated investors, and looks at why a new asset class is needed to reduce risk and increase returns among income-focused investors in Australia.

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This article is for information purposes only. It does not take into account your objectives, financial situation or needs. Any opinion expressed in this article are of the author and is subject to change without notice. Readers are reminded to exercise caution and use their own judgment when interpreting and applying the information contained in this article.

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We would like to acknowledge the Traditional Custodians of the lands, seas, and communities in which we provide our services. We would also like to pay our respects to the Elders past, present and emerging, and the continuing cultural influence they have on Australia.

Zagga Market Pty Limited (Australian Credit Licence 490904) ACN 611 662 401 acts as the Servicer of loans acting on behalf of the credit provider, Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786, trustee of the Zagga Investments Lending Trust

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All portfolio numbers quoted correct as at 30 October 2024.

*Average investor return across the active portfolio as at 30 October 2024.

**Target return is after expenses and any applicable management fees for the year ending 30 June 2024. OCR = Australian Reserve Bank Official Cash Rate.

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