Small company funds quarter in the spotlight

Investors in managed funds have had a good year in past 12 months, despite the last quarter being a little lacklustre.

Thursday, October 21st 1999, 12:00AM

Investors in managed funds have had a good year in past 12 months, despite the last quarter being a little lacklustre.

Research house Morningstar says funds the average total return for unit trusts in the 12 months to September 30 was 9.77 percent, and the average annual total return for superannuation trusts as a group was 7.00 percent.

However, in the last three months performance overall was lacklustre with just funds investing in trans-Tasman smaller company shares shining.

In the three months to September 30, four of the 10 top unit trusts and group investment funds by total return, and five of the 10 top superannuation trusts by total return were trans-Tasman shares, particularly those investing in smaller companies.

While the NZSE40 gross index fell 3.14 percent during the quarter, the smaller companies gross index returned 3.41 percent. It was the same story on the other side of the Tasman: the ASX All Ordinaries Accumulation Index fell 1.96 percent over the quarter, but the ASX Small Ordinaries Accumulation Index returned 5.78 percent.

The managers of funds investing in these smaller company shares were therefore able to successfully minimise the impact of a falling market on their investors’ returns, and figured prominently among the top-performing managed funds tables, Morningstar says.

Overall though, the average total return for unit trusts as a group for the quarter was –0.18 percent, while superannuation trusts as a group produced an average –0.34 percent total return over the September quarter.

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