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SIO Conference 2013
MARTIN GROSSKOPFVICE-PRESIDENT AND PORTFOLIO MANAGERDIRECTOR, SUSTAINABILITY RESEARCHACUITY INVESTMENT MANAGEMENT INC.June 2013
Income Inequality and the MarketIs there a cause for concern?
The land of “unequal opportunity?”
Source: BCA Research, as of May 31, 2013
Icelan
dSlov
enia
Norway
Denmark
Czech
Rep
ublic
Finlan
d
Slovak
Rep
ublic
Belgium
Austria
Sweden
Luxe
mbourg
Hunga
ryGerm
any
Netherl
ands
Switzerl
and
Fran
cePola
ndIre
land
Korea
New Z
ealan
dIta
lyEsto
niaCan
ada
Austra
liaJa
pan
Greece
Spain
United
King
dom
Portug
alIsr
ael
United
Stat
esTu
rkey
Mexico
Chile
OECD-34
0.20
0.25
0.30
0.35
0.40
0.45
0.50
0
5
10
15
20
25
30
Gini coefficient ( )↗ S90/S10 income decile share (right scale)
Gin
i coe
ffici
ent
S90/S
10 income decile share
Considerable global variation
Notes: See notes to Figure 1. Information on data for Israel: http://dx.doi.org/10.1787/888932315602Source: OECD Income Distribution Database (www.oecd.org/social/income-distribution-database.htm)
Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010
More Context
Source: Martin H. Barnes, Chief Economist, BCA Research, Key Issues in the Economic and Financial Outlook, May 2012
0
0Market income inequality ( )↗ Disposable income inequality
Source: OECD Income Distribution Database (www.oecd.org/social/income-distribution-database.htm)
Negative impact of the financial crisis
Percentage point change in the Gini coefficient of household market and disposable incomes between 2007 and 2010
Positive effects of redistribution
Source: Barry Bannister, Economic Outlook, 2013
Negative impact of the financial crisis
Positive aspects of recovery
Source: Ned Davies, US Economic Outlook, June 13, 2013
Negative: wage growth at a 25yr low
Source: FactSet, Bureau of Labour Statistics, Macquarie Research, June 2013
Positive: Corporate Profit Margins & Unit Labour Costs (ULC)
Source: Ned Davis Research, 2012
Positive: S&P Stock Index & Non-farm Unit Labour Cost (ULC)
Source: Ned Davis Research, 2012
Going forward: factors of production respond differently
• In 3 deepest recession since 1970 one factor always lagged
Source: Barry Bannister, Economic Outlook, 2013
Going forward: offshore unit labour benefit is dissipating
Source: BCA Research, as of December 31, 2012
Disclaimer
The commentaries contained herein are provided as a general source of information based on information available as of June 13, 2013 and should not be considered as personal investment advice or an offer or solicitation to buy and / or sell securities. Every effort has been made to ensure accuracy in these commentaries at the time of publication, however accuracy cannot be guaranteed. Market conditions may change and the manager accepts no responsibility for individual investment decisions arising from the use or reliance on the information contained herein.Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated
The information contained in this commentary is designed to provide you with general information related to investment alternatives and strategies and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. We strongly recommend you to consult with a financial advisor prior to making any investment decisions.