Clients cautious in down market

Opportunity lies in shares

By Karin Derkley
Wed 16 Apr 2008

Capital protected investments become flavour of the month following market volatility.

Investors invariably become interested in capital protected investments when the market has taken a beating, according to an industry expert.

However, it would seem to make more sense to lock in profits in a booming market that looks to be near its peak.

As such, the volatile markets of the past 12 months had driven a threefold increase in inflows into the structured product market, according to Macquarie Equity Markets Group associate director Pia Cooke.

Macquarie Equity Markets Group spent a year talking to advisers to find out what kinds of investment products they and their clients were looking for in the lead-up to June, Cooke said.

While 55 per cent of financial planners said their clients were not keen to invest further in shares just yet, more than a third said their clients were increasingly looking for opportunities in shares now the market had fallen.

"The Australian share market has fallen by around 20 per cent in the past six months," Cooke said.

"Nobody knows how close we are to the bottom, however, many sophisticated investors are beginning to see value in quality blue chip shares.

"Buying opportunities might now emerge for people who have long-term time horizons and want to get in at lower prices."

She said the MQ Listed Protected Loan would suit investors who were cash poor but keen to gear 100 per cent into the market and take advantage of the product's tax efficiencies.

Listing the product on the Australian Securities Exchange meant investors could walk away from any losing shares in their share portfolio without having to make any further payments.

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