ASX Share prices now provides daily commodity prices!
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See below for prices for the following commodities:

• Gold price
• Silver price
• Platinum price
• Copper price
• Nickel price
• Oil price

The ASX All Ords, which is an abbreviation for the All Ordinaries Index, or All Ordinaries for short was created in 1980. Historically, it represents the oldest index of shares in Australia, the reason being because it consists of nearly the entire ordinary share list on the ASX. In terms of value, the market capitalisation or market cap of the list of companies on the All Ords represents the majority of the value of all ASX-listed shares. On the ASX, the All Ords is represented with the ticker XAO.

In 1980, the ASX All Ords had a value of 500 points, which would provide a benchmark for future growth on the ASX. Supposing that the All Ords was to increase to 5000, this would mean an increase in the value of the stocks by a factor of 10.

The structure of the All Ords was changed in 2000 to represent the top 500 companies on the ASX by market cap. Also introduced at this time, was the ASX 200 index and with the ASX 100 index being derived from the ASX 200 index.
Nowadays, the All Ords has become a secondary index, due to the popularity of the ASX 200.
Historically, the All Ords was at its highest in November 2007, with a value of 6873, reaching a low point of 3,111 due to the 2008/2009 recession. At the time of writing, the ASX All Ords is around the 4,000 mark

The ASX 100 index is a list of Australia’s top large capitalisation stocks. This index acts as a benchmarch of the performance of the overall ASX. Note it actually relates to the top 110 companies, as opposed to the ASX top 100.

ASX 100 Index

Note the top 100 ASX stocks will vary on a regular basis as the bottom entries get ‘bumped out’ and replaced with rising higher capitalisation stocks

Prices on the Australian Stock Exchange are delayed by 20 minutes. ASX provides the ability to search for current Australian share prices by company security codes, company name or industry group

REITs stand for Real Estate Investment Trusts. In order to appreciate REITs, a reader needs to understand the principle of investing in a real estate asset class. Up until recently, investing in real estate was not possible unless through direct investment.

REITs are companies that are dedicated to managing, owning and operating real estate assets that produce income. Such assets can include:

• shopping centres
• offices
• warehouses
• car parks

REIT investors

Institutional investors have ownership in the large majority of commercial real estate in Australia. Such institutions include superannuation funds, insurance companies and commercial banks. Why should investors consider investing in REITs instead of direct ownership ?

Advantages of REITs

Professionally Managed Properties

In the case of direct ownership, an investor is required to look after the maintenance of a property. REITs allow investors to distance themselves from the day to day running of the property/properties as they can be managed by an industry professional that can leverage off their own funds to provide a better service.

Reduced personal risk

Under a traditional real estate investment model, if an investor wanted to invest in real estate, they would be required to take on debt to purchase a property. Either that or they would be required to sell off existing assets to fund the purchase – either result is not suitable.

A $2,500 investment in an REIT would result in the same pro-rated rewards as say a $80,000 direct investment in a property. In addition, the REIT investment would be diversified across a range of investments, rather than one single property.

Liquidity

One of the well-known disadvantages of direct real estate investment is the problem of liquidity; it is hard to shift property quickly. REITs offer far higher liquidity and prices can in fact fluctuate on a daily basis. Investors can quickly ascertain the value of their investment, unlike with a direct investment, where a daily or even weekly quote would not be possible.

An REIT would be able to quickly sell off their holdings to generate cash for other investments.

Cash flow for Retirement

REITs provide investors excellent cash flow for retirement because the cash dividends provide an income on which a retiree can live off.

Disadvantages of REITs

Volatility

Because REITs are quoted on the ASX stock market, they are more volatile than a typick ‘bricks and mortar fund’. The main reason for this is that in addition to having an asset value, they also have a fluctuating share value.

The price of an REIT may fall due to negative feelings about the property market, even in the even event of stable property market prices.

Gearing

Some REITs use leverage to increase the potential returns for their investors, resulting in both higher gains and losses.

Income not guaranteed

Past dividends/distributions cannot be guaranteed for the future, unlike say a fixed rental arrangement with direct investment

CFDs are an abbreviation for Contracts for Difference. CFDs act as an agreement between a broker and yourself to exchange, at a contract’s end date, the gap or difference between the closing price and the opening price. This figure is then multiplied by the quantity of shares in the contract, resulting in a net profit or loss.

Put simply, you can speculate that the price of a share will either rise or fall and then allocate an investment accordingly.

Going long or short with CFDs

If you believe that the price of a share will rise, you take a long position. Conversely, if you predict that the share price will fall, you take a short position. Regardless of the choice of long or short, you will make a profit or loss on your initial investment.  This is the biggest differentiator between buying CFDs and say buying traditional shares in a company.
Going short allows the investor to make money, even in the event of a lower share value, provided that you have

a) made an accurate prediction; and

b) taken a short position.

By going short, you sell off stock that you don’t own and in the future, buy it back at a reduced price, resulting in a profit.
Unlike in a traditional share buying model, in CFD trading, you never actually buy the underlying share; the CFD acts as an instrument for you to access changes in the price of a share. Like traditional shares, in the event of you taking a long position, you would be entitled to future dividend payments.

CFD Brokers in Australia

The following CFD Brokers provide investors the ability to buy CFDs on the ASX

CMC Markets

CMC Markets have been operating in Australia since 2001, by providing traders with market access and education. CMC Markets currently operate globally with online financial trading on 4 continents. CMC Markets are winners of the following awards:
Money Magazine Best of the Best Awards – Best CFD Provider (2008)
Smart Investor Blue Ribbon Awards – Recommended for CFDs (2008)

First Prudential

First Prudential Markets (FPM) is an Australian company specialising in CFDs and offer Direct Market Access (DMA) to a large range of Australian share CFDs, Global Index, and Share CFDs on over 24 exchanges.
As a full participant of the Sydney Futures Exchange Limited (SFE), First Prudential Markets are a key participant in the launch of the world’s first exchange traded CFD – ASX CFDs.

IG Markets
IG Markets is part of the IG Group, which has several operating companies offering a variety of speculative products to a retail and professional client base. Some facts about the IG Group

• UK FTSE 250 member
• Over 70,000 active clients worldwide
• ASIC-regulated

IG Markets provides traders with access to thousands of global share CFDs plus forex, indices, commodities.

MF Global

MF Global Australia Limited (MFGA) provides traders with a full range of financial products and services. The products offered include exchange traded futures, options and futures on options, foreign exchange (Margin FX), Contracts For Difference (CFDs) and equities.

Marketech

Marketech is a Contracts for Difference (CFD) provider that offers Direct Market Access (DMA) to the Australian Securities Exchange (ASX). We offer trading on over 2600 ASX listed companies, through our very own trading platform. Marketech offer the following features:

• Direct Market Access (DMA) only
• CFDs on every listed ASX stock
• Free live data for accounts valued higher than $5,000
• Margins from 5%
• Free trading platform

Firstly, what are futures?

Futures trading is a type of trading which involves speculation relating to the price of a commodity moving up on down in a market.

The futures markets are considered to be the most common form of day trading. Trades made on futures markets can take place at low commissions and unlike the stock market, trading does not need to take place during the day.

In Australia, there are a number of futures exchanges – these are listed below:

Futures Markets in Australia

Full service futures brokers vs. non-advisory futures brokers

As with stock brokers, Futures brokers are brokers that assist with the trading of futures.

Futures brokers exist under two categories, full service Futures brokers and non-advisory Futures brokers. The main difference is that full service brokers provide assistance relating to different types of trades, whereas advisory brokers do not

Full Service Brokers

Full service brokers operate in a similar manner to financial planners in that in addition to offering advice on buying and selling shares, they can design a custom trading plan based on your needs. As a result of this tailored plan, a full service broker will charge a higher brokerage fee than a non-advisory broker.

Non-advisory Brokers

Non-advisory brokers do not provide any advice on your decisions to purchase particular shares. For this reason, brokerage costs are significantly lower and these brokers will be more suitable to traders that are confident in their trading techniques. These brokers are either telephone or more commonly, Internet based.

Futures Brokers in Australia

Interactive Brokers

Interactive Brokers have access to futures on over 80 market destinations worldwide, with $4.4 billion in equity capital.

MF Global

MF Global

At MF Global, you can trade both global futures and forex futures. In addition to offering access to Australian futures, MF Global offer access to 25 of the world’s leading futures exchanges and – more than 300 futures products in all.

Mirus Futures

Mirus Futures is a provider of commodity trading brokerage services providing trading solutions for:

* Managed Futures
* Automated Trading System
* Self – Directed Trading

Morrison Securities

Morrison Securities is a broker Participant of the Australian Stock Exchange (ASX) and the Sydney Futures Exchange (SFE), providing commissions from $5.00 per Contract

Why use a Stockbroker?

Many people prefer to pay for the services of a broker as they feel more comfortable making decisions about investing in the stock market with the assistance of an industry professional.
Stockbrokers get paid a commission on the trades that they make on the stock market. In addition to getting paid a commission, stockbrokers are paid on a performance basis, depending on how well a particular stock performs on the stock market.

Different types of Stockbrokers

Stockbrokers come under 2 categories, full service brokers and non-advisory brokers. The basic difference is that full service brokers provide advice relating to investments, whereas non-advisory brokers do not.

Full Service Brokers

Full service brokers operate in a similar manner to financial planners in that in addition to offering advice on buying and selling shares, they can design a custom investment plan based on your requirements. As a result of this tailored schedule, a full service broker will charge a higher brokerage fee than a non-advisory broker. Not limited to providing advice on shares, full service brokers will also provide advice on warrants, options and futures

Non-advisory Brokers

Non-advisory brokers do not provide any advice on your decisions to purchase particular shares. For this reason, brokerage costs are lower and these brokers will be better suited to those investors that are confident in their share buying decisions. These brokers are either telephone or more commonly, Internet based.

How much brokerage does a stockbroker charge?

For a $10,000 trade you would expect to pay anything from $15 to $40 in brokerage when using a discount or online broker. If you were to use a full-service broker you can expect to pay $150 or more. At the time of writing, Bell Direct offers the most competitive rates with $15 per trade.

CANSTAR CANNEX Online Share Trading Awards

CANSTAR CANNEX provides fact-based data and ratings to Australian consumers and financial institutions. CANNEX star ratings are a consumer-friendly benchmark that help you compare financial products based on their rates and features.

In April 2009, they awarded 5 stars for outstanding value to the top three online trading accounts in
each investor category.

Investor

Bell Direct – Silver
CommSec – Share Trades Internet Preferred
First Prudential Markets – FP Online

Sophisticated Investor

CommSec – Share Trades Internet Preferred
Morrison Securities – htmllRESS
NAB Online Trading – Premium

Active Trader

Bell Direct – WebIRESS
First Prudential Markets – WebIRESS
Morrison Securities – WebIRESS

For more information, see the CANNEX CANSTAR website.

An fund manager is an individual or firm that advises clients on investment matters on a professional basis.

They tend to fall into two distinct categories:

• fund managers offering direct financial advice to individuals or businesses, or
• fund managers offering asset management for (typically) corporate clients, hedge funds and/or mutual funds.

Depending on the nature of their billing model, fund managers may charge fees calculated as a percentage (e.g., 1%) of assets under management (see: fee-only financial advisor), on a yearly basis, an hourly or on a “flat fee” basis.

Australian Fund Managers

See below for a list of major fund managers operating in Australia

AMP Capital Investors

AMP Capital Investors (AMP Capital) is one of Australia and New Zealand’s leading specialist investment managers, is a specialist investment manager with over $113 billion in funds under management.

Ausbil Dexia

Ausbil Dexia Limited is an Australian equities specialist with approximately $7 billion in funds under management.

AXA

AXA Australia and Alliance Capital US have joined forces to form an Australian investment operation, Alliance Capital Management

Australia, that will give Australian investors access to Alliance Capital US’ globally integrated style and proven performance.

Barclays Global Investors

Barclays Global Investors Australia Limited is the Responsible Entity of the Barclays Managed Investment Funds – Diversified Growth

BNP Paribas Investment Management (Australia) Limited

BNP Investment Management (Australia) Limited currently distributes the MFS Global Equity Trust to Australian investors.

BT Financial Group

BT Financial Group (BT) is the fifth largest investment manager in Australia with more than $95 billion under management

Challenger

Challenger Financial Services Group was born out of the merger between Challenger International and CPH Investment.

Challenger is one of Australia’s largest non-bank lenders with a mortgage book of  over $20 billion, funding commercial loans as well as a range of residential mortgage products offered by a network of preferred lenders under their own brands. The company’s more recent acquisition of interests in the distribution and aggregation segment of the market have made it one of the largest mortgage industry participants, with a network of over 5,000 brokers and more than $72 billion in mortgages under administration.

Colonial First State

Colonial First State Global Asset Management is Australia’s largest asset manager of Australian-sourced funds.  It manages more than $119 billion across a diverse range of asset classes including Australian and global shares; cash, fixed interest and credit’ property securities, hedge funds, direct property, private equity, infrastructure and global resources.

Credit Suisse Asset Management (Australia) Limited

Credit Suisse Asset Management is the asset management arm of Credit Suisse First Boston, part of the Credit Suisse Group, one of
the world’s largest financial organisations, being active in retail banking, private banking, investment banking, insurance and asset
management.
Globally, Credit Suisse Asset Management manages and advises on approximately A$434 billion (as at 31 March 2005) in funds for
its clients. They have been operating in Australia since 1990, and currently manage approximately A$19 billion (as at 31 March 2005)
on behalf of a range of clients including superannuation funds, government agencies, large companies and private individuals.

Investors Mutual Limited

Investors Mutual Ltd (IML) is a specialist Australian equity manager based in Sydney. Established in 1998, IML has grown steadily

since then to more than A$5.6 billion in funds under management as at 30 June 2005.

IOOF Investment Management Limited

IOOF Investment Management Limited (I00F) is a progressive, Australian funds management organisation, which was originally
founded in 1846.
Perennial Investment Partners Limited (Perennial) was launched in August 1999 as IOOF’s specialist investment management
company and a majority-owned subsidiary of the IOOF Group.Perennial offers investment expertise across all the major asset classes
including two styles of Australian equities, international equities, Australian and global fixed interest, cash and multi sector style
products. Additionally, Perennial manages a range of wholesale and retail unit trusts for IOOF.

Merrill Lynch Investment Managers

Merrill Lynch Investment Managers Limited is an Australian subsidiary of Merrill Lynch & Co. Inc. (Merrill Lynch). Through its
subsidiaries and affiliates, Merrill Lynch provides investment, finance, advisory and related services on a global basis. Merrill Lynch’s
Asset Management Group, known globally as Merrill Lynch Investment Managers, manages more than A$612 billion for clients
around the world, and approximately A$8 billion in Australia, as at 31 December 2004.

Perpetual

Perpetual Investment Management Limited (Perpetual Investments) is one of Australia’s leading investment managers, with over
A$26.7 billion in funds under management for more than 155,000 investors (as at 30 June 2005).
Perpetual Investments is part of the Perpetual Group, which has been in operation for over 115 years. Property is managed by
Perpetual James Fielding Limited (PJF). PJF is a joint venture between Perpetual and the James Fielding Group. PJF aims to
broaden the property securities investment offerings available to investors.

Platinum

Platinum Asset Management Limited (Platinum) is an Australian based fund manager that specialises in international equities.

Schroders

Schroder Investment Management Australia Limited (SIMAL) is part of the Schroder Group which, as at 31 March 2005, manages

investment assets of approximately A$265 billion worldwide.

In Australia, investment management has been a core business since 1961. As at 30 June 2005, SIMAL managed A$10.6 billion

across a broad range of asset classes.

UBS Global Asset Management

UBS Global Asset Management is a business group of UBS, one of the world’s leading financial services groups.

In Australia, it has been in operation since 1985 and is one of the larger Australian institutional asset managers, with over $29 billion under management

UBS Global Asset Management’s strong local presence and its integrated global network enable it to understand and meet the

domestic and international investment needs of Australian investors.

Vanguard Investments Australia

Vanguard Investments Australia Ltd was established in 1996. Vanguard Investments Australia has become Australia’s leading index funds manager with over A$60 billion in funds under management.

Zurich

Zurich Financial Services Australia Limited is a member of the Swiss based Zurich Group. Zurich offer an extensive range of

investment, life insurance, superannuation and general insurance products and services for individuals, small to medium-sized

businesses, larger companies and multi-national corporations. As of 2008 Zurich had over $6.5 billion under management

Managed funds consist of professional managed pools of funds that are invested into various investment vehicles such as property, shares and cash. Investors have the ability to buy units in funds, with the prices of units varying on a daily basis, as determined by a variety of fund managers. In order to buy into a fund, an investor typically outlays a minimum of AUS $1K to $5K.
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History of Managed Funds in Australia

The Australian funds management industry represents one of the largest managed funds market in the world, with total funds under management of A$1.3 trillion(1) (June 2007). It has been conservatively estimated that this figure will double by the year 2015.

Why has the managed fund industry experienced such growth? There are a number of factors that explain the growth of the industry:

• an educated investor base
• mature markets,
• representation from global investment companies
• modern investment vehicles
• a fair regulatory environment
• The superannuation/pension fund system

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Diversity of investment products

In the past 10 years there has been a growth in the number of alternative investments in Australia:

Hedge funds

Australia’s hedge funds industry has approximately A$70.3 billion in funds under management. Industry analysts expect this to grow strongly over the next five years as institutional investors, especially superannuation funds, seek to increase their allocation to the sector

Infrastructure investment

These funds seeks total return from both capital appreciation and current income through investing in a portfolio of infrastructure securities.

Listed property trusts

A listed property trust (LPT) is a collective investment vehicle that owns a portfolio of real property. Listed property trusts are quoted on the Australian Stock Exchange (ASX), which allows investors to purchase an interest in a professionally managed portfolio of commercial real estate

Unlisted property trusts

an unlisted property trust is similar to the above, however is not listed on the ASX

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Private equity

Private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange such as the ASX

Australia has a rapidly growing private equity sector, spanning de-listings of large listed companies through to grass roots investment in venture capital. In recent years, the Australian Government has introduced a number of far reaching changes to the tax treatment of venture capital investments, with the goal of enhancing the industry’s international competitiveness