Yellow Brick Road has broadened its suite of products, launching a high-performance savings solution – the Smarter Money Fund.
Speaking about the new fund, Yellow Brick Road’s executive chairman Mark Bouris said until now, consumers have had few choices between the extremes of low-interest bank accounts and the high volatility and returns of the share market.
“Experts recognise that Australian savings have earned sub-par returns, and have been overexposed to the vagaries of the share market. It is beyond time that Australian families were given the chance to invest like the top end of town,” he said.
Just before the global financial crisis, the OECD found that about 70 per cent of the money Australian households entrusted to super funds was being invested in domestic and global shares.
During the crisis, global share prices fell by more than half, just as they did in 2001. Yet over the last 25 years, safe investments like Australian government bonds have yielded better total returns than global shares with substantially lower risk of loss. As Australia’s population ages, households are naturally looking for more certainty and security in their portfolios.
“RBA analysis shows that the major banks earn about 2.4 per cent per annum more than they pay retail depositors,” Mr Bouris said.
“We created Smarter Money to help families tap into the institutional cash markets that the likes of Ken Henry and David Murray say they don’t have enough exposure to. We think that by putting pressure on the savings industry we will foster more competition, and ultimately better returns for all Australians.”