Tuesday, November 30, 2004
In a somewhat surprising turn-around, leader Don Brash says the National Party will no longer oppose the NZ Superannuation Fund set up by Michael Cullen, even though before the last election Brash labelled the fund "a serious mistake".
A real worry, though, is not which party thought up the idea, but whether the Fund will produce what is expected. In a revealing article about managed investment funds, economist Gareth Morgan points out that the Consumers Institute discovered that investors typically receive around a third of the returns their invested funds earn.
Now admittedly, this is largely because of the fees being creamed off by the investment managers. But the government fund also has to be managed by someone, and it would be revealing to know what the true administration costs are, and how much that reduces the worth of the fund.
A real worry, though, is not which party thought up the idea, but whether the Fund will produce what is expected. In a revealing article about managed investment funds, economist Gareth Morgan points out that the Consumers Institute discovered that investors typically receive around a third of the returns their invested funds earn.
Now admittedly, this is largely because of the fees being creamed off by the investment managers. But the government fund also has to be managed by someone, and it would be revealing to know what the true administration costs are, and how much that reduces the worth of the fund.
