This article compares the hybrid notes issued by Australian banks to the 'catastrophe' bonds issued by insurance firms.  The similarities and differences bring out key ideas about the type of risk that hybrid notes contain, and therefore which investors they best suit.

Stock market investors have to decide whether they will be ‘active’ or ‘passive’ investors. The fundamental ideas that frame this choice are poorly understood, even by many investment professionals.  So, when I heard (on 16 January) of the passing of the great Jack Bogle – the foremost exponent of passive stock market investing, and the founder of Vanguard – I thought I would write this article on the fundamentals of the active v passive question in his honour. It is the first in a series on active vs passive management issues that I have planned.   

Breaking ground for new apartment towers continues apace in Sydney, and has actually accelerated in Melbourne.  Does that tell us that the inner-city property development boom goes on unabated – no, definitely not.  Melbourne residential property prices fell over 10 percent in the last year and approvals for new apartments are predicted (by the Master Builders Association) to fall 30 percent in the next 3 years.  So, what is going on?