Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

23 August 2026

Home / 25

Edition 25

  •   2 August 2013
  •      
  •   

Welcome from Chris Cuffe

The major investment story in the news this week came from Peter Morgan and my old colleague, Greg Perry. They told the AFR that fund managers gleaned inside information through their access to corporate executives, giving professional investors an unfair advantage. At the end of our time at Colonial First State in 2002, Greg gave an interview where he discussed this issue in more detail, and we have extracted some relevant parts. For your interest, the entire interview is attached here as an exclusive for our Newsletter readers. We have not heard the last on this subject.

The expression ‘smart beta’ is appearing more often in the financial media, although it’s been around for at least a decade. Whereas traditional index funds weight stocks in a portfolio by their market cap, smart beta funds use another weighting criteria (such as economic footprint, volatility or even equal weighting) to create a portfolio with index-like characteristics. The jury is out on whether these funds are ‘index’ or ‘active’ by another name, but either way, they’re worth knowing about.

The most successful non-cap-weighted index funds in Australia are offered by Realindex, established in 2008 by the Editor of Cuffelinks, Graham Hand, now with over $6 billion under management. But eschewing any favouritism, Ibbotson provides its perspective, proposing that smart beta funds should have a capital preservation strategy when market valuations become stretched.

Ashley Owen continues his revealing series on ‘Investing against the herd’, showing from consumer sentiment data that we feel most bullish at or near the top of share market booms, just before the falls. And Chris Stott takes a close look at LICs, and argues the recent changes in FOFA and improved ability to pay regular dividends increases their appeal. Finally, Rick Cosier laments the lack of financial education in our school system, especially in the context of increasing amounts of personal borrowings and long life expectancy.

Chris

Latest posts from Cuffelinks, 2 Aug 2013, Edition 25

  • Greg Perry on insider trading and brokers as principals Graham Hand
  • The fifth dimension of smart beta Peter Bull and Michael Ng
  • Investing against the herd, Part 2, Consumer sentiment Ashley Owen
  • The evolution of Listed Investment Companies Chris Stott
  • Education not just legislation Rick Cosier

Download PDF

 

  •   2 August 2013
  •      
  •   

 

Leave a Comment:
Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Does your will qualify for the discretionary testamentary trust exemption?

Treasury has confirmed the exemption many families were hoping for. But buried in the fine print are two conditions that could leave some wills on the wrong side of the exemption, despite years of careful planning.

Are you making these SMSF mistakes?

After four decades advising investors, there are a few common mistakes I've seen SMSF investors make. From holding too much cash and chasing yield to overtrading and trusting tips. Are these errors costing you?

Lithium's latest drop and what it means for ASX investors

Lithium's latest sell-off has punished ASX miners as prices remain hostage to shifting expectations. The key challenge is navigating a market prone to extreme volatility despite a strong case for the long-term demand outlook.

Why have Australian living standards 'fallen' and how do we fix it?

For the last few years there has been much talk of a 'cost-of-living' crisis in Australia and of 'falling living standards'. Lately this has flared up again with the pickup in inflation resulting in a renewed fall in real wages.

Retirement spending is not one-size-fits-all

New data challenges the idea that Australians are underspending their super. The bigger issue may be helping retirees navigate complexity, make confident decisions and use their savings to support security, wellbeing and choice.

The missing link in the CGT debate

A little-noticed consequence of Labor’s tax changes could have implications well beyond investors’ tax bills. The issue raises bigger questions about incentives, capital allocation and the drivers of long-term economic growth.

Latest Updates

Planning

Testamentary trusts have secured the CGT exemption

Treasury’s latest CGT reform draft delivers a win for testamentary trusts and deceased estates, exempting estate-derived gains from the 30% floor. However, questions on death and divorce rollovers remain unresolved.

Superannuation

How much super should you have?

Average super balances are one of the most misleading benchmarks. They ignore your goals, spending and future needs, creating a false sense of security. Here is how I calculate exactly where I need to be at every decade.

Retirement

Retiring from work is easy, retiring into life is harder

Most people spend decades planning how to retire. Far fewer plan for what comes next. The biggest retirement challenge isn't always financial, and it often catches even the most prepared retirees completely off guard.

Shares

Right asset class, wrong index: the trap in Australian small caps

Most Australian portfolios are concentrated in large caps, with relatively little exposure to smaller companies. But what if the biggest risk isn't the economy, interest rates or valuations? For many, the risk is hidden in plain sight.

Property

Are these assets the missing piece in Australian portfolios?

Many investors remain concentrated in shares, cash and property. Despite their popularity among institutional investors, real assets remain underrepresented in many SMSF portfolios. Could they be the missing piece?

Investment strategies

The biggest risk that buy-and-hold investors ignore

Investors spend decades learning how to stay invested, yet few have a plan for getting out. When a financial goal has a hard deadline, a worked example shows why a fixed derisking schedule should outrank buy-and-hold discipline.

Investment strategies

How passive investing is driving the decline of active fund alpha

Why have active managers struggled as passive investing has surged? Research suggests that flows into index funds and ETFs are creating structural headwinds, penalising the stock-picking strategies that once generated alpha.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

Site Map

About Firstlinks

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.