Archive | Managed funds

Investors pull $200 million from managed funds as value rises

Published: 1 February 2005

Investors withdrew a net $220.8 million from managed funds in the December quarter, but FundSource Research Ltd (David van Schaardenburg) said strong performances grew aggregate net funds under management by $300 million.

That 1.9% gain took funds under management to $19.9 billion.

FundSource business manager Tim Anderson said investors withdrew $630 million through the whole of 2004, but funds under management still grew by $690 million.

Mr Anderson said the withdrawals were both disappointing & surprising: “Net outflows in the face of good performance come as a surprise to us as this pattern goes against our past experiences of investors’ behaviour.

“With improving forecasts in international equities & strong momentum in New Zealand equities, it also raises the question of whether these investors are making rational choices guided by a sound investment strategy, or instead relying on less rational decision criteria.”

Mr Anderson said the December quarter outflow was up 11% on the $200.1 million pulled out during the September quarter and the biggest withdrawal since the first quarter of 2003.

Only international fixed interest ($15.4 million) & New Zealand property ($2 million) attracted funds in the December quarter. $107.9 million was pulled out of diversified funds, $61.8 million from international equity (global & regional) funds. Diversified funds are the industry’s biggest category, with nearly $7 billion under management.

Website: FundSource full article


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Positive run continues for equity funds, says FundSource

Investment research company FundSource says its half-year analysis shows equity fund investors have continued their run of positive returns.

New Zealand active equity funds grew by just under 6% for the half & 12% for the June year.

International equity funds grew by just under 6% for the half & 14.5% for the year.

FundSource’s summary of the main investment sector performances:

NZ active equity unit trusts:

New Zealand investors have more than $850 million in New Zealand equity funds. Average performances for active funds in June were up 5.93%, equity fund managers returned on average 14.55% for the year versus the NZX50 Gross (33%) return of 14.28%.

Top performer was the Fisher Funds NZ Growth fund with 21.39% for the year (8.38% for 6 months), while AXA Australasian Selected Equities rose 15.77% for the year after a 4.79% return in the half year.

“Short-term performances in the NZ equity sector continue to reflect a persistently buoyant New Zealand

economy. What we find of considerable note, however, is that over the medium & longer terms, NZ equity

funds continue to add value for their investors.

“Over a 5-year period, for example, active NZ equity funds have returned 7.28% (post tax & fees) relative to the NZX50 Gross Index (33%) returning 6.18%,” FundSource general manager Tim Anderson said.

No NZ equity funds reported returns under 10% for the year.

International equity unit trusts:

New Zealand investors have $2.4 billion invested in international equity funds. International equity funds have slightly underperformed the index this year, as measured by the MSCI World Free Gross (33%), with average returns of 4.77% versus 5.11%. While the index gained 10% in the June year, international equity funds in the same period gained over 12% (after tax & fees) on average.

The BNZ International Equity Trust (FundSource’s 2003 international equity fund of the year ) led with 5.56% for the half, 18% for the year. Other solid performers for the year included the ING International Share Fund (16.08%) and the ANZ World Equity Trust (16.05%).

“Sustained positive performances in international equity funds continue to be encouraging for investors.

Certainly, the harsh reality of international equity investing is still fresh in many minds, but with a historic bear market now behind us, investors are looking forward to strong offshore economic conditions, realising further positive international equity returns,” Mr Anderson said.

Diversified funds:

This is the largest managed fund sector, with more than $7 billion of New Zealanders’ money invested. Diversified funds also enjoyed strong growth in the June year.

Primarily on the back of positive equity market performance, balanced funds returned 2.75% in the half, 7.32% for the year. As to be expected with a higher allocation to equities, growth-orientated diversified

funds performed better with a 3.84% over the half & 9.69% for the year.

Website: FundSource

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