Another bad quarter for AMP Henderson

Wednesday, October 16th 2002, 12:00AM

by Jenny Ruth

The September quarter was another that AMP Henderson would probably prefer to forget. Although just about every other asset class performed well and even returns from New Zealand shares were only just in the red, once again sharp losses on global equities dragged returns from all its managed funds into negative territory.

"September equity returns were the worst we’ve seen for some time, although New Zealand fared quite well compared to global markets," says chief investment officer Chris Wozniak.

The Top 40 gross index shed 2.53% in the September quarter but was up 13.2% in the year ended September. By contrast, the global Morgan Stanley gross index was down 15.47% in the quarter and 29.9% for the year.

Nevertheless, he recommends investors stick to well-diversified portfolios, noting that equities will eventually recover.

"Globally, despite the overwhelmingly negative sentiment, if you look at the economy, it’s actually relatively robust," Wozniak says. While nowhere near as strong as previous periods in the last 20 years, it’s still in positive territory.

The price-to-earnings ratio of US stocks is now down to about 15 times earnings which equates to a yield of about 6.5%. By contrast, longer-term US bonds are now yielding about 3.6%.

"The premium you get for investing in equities is stronger than we’ve seen in 15 years," he says. That doesn’t doesn’t necessarily mean stocks are outstandingly cheap. US bonds are looking very expensive with yields at 44 year lows.

AMP’s managed funds returns for the quarter ranged from a 1.34% loss from its low risk fund, to 5.44% for its balanced fund and 10.75% for its high risk fund. Anuually, only the low risk fund managed a positive return of just 0.6%, which Wozniak noted wasn’t even enough to compensate for inflation.

The balanced fund returned negative 7.67% for the year while the high risk fund returned negative 14.23%.

Against the index benchmarks, AMP’s actively managed equities performed better in the latest quarter with a negative return of just 0.64%, but did worse in the year with a positive 9.2% return. Its actively managed global portfolio did slightly worse in the quarter with a negative 15.95% return but considerably better in the year with a negative 24.25% return.

The news was much brighter with bonds, cash and property. The latter achieved a positive 0.84% return for the September quarter and a strong 8.04% for the year.

AMP’s New Zealand bonds achieved a 4.02% return for the quarter, beating the index’s 3.88% return, and 7.69% for the year against the index’s 7.43%. Its global bonds underperformed the benchmarks. It achieved a 3.65% return for the September quarter against the 4.93% for the global bond index and 9.55% for the year against the 10.14% for the global index. AMP’s cash returns were 1.57% for the quarter and 5.64% for the year.

Despite the poor overall returns, AMP has still managed to attract more than $335 million in new wholesale funds so far this year.

« News Round Up

Sovereign takes regulation bull by the horns »

Special Offers