Managed funds back in favour
Morningstar's market share report for December shows there have been good funds flow in December, but it also reveals a concern.
Thursday, January 29th 2004, 6:44AM
Morningstar says that there was a $27.9 million overall net inflow for the December quarter.
“The resultant $39.0 million net outflow for the year to December 30 has now meant the peak
annual outflow achieved in March 2003 of $752 million has now almost been extinguished.”
Perhaps the most concerning aspect of the quarter is that investors are still favouring income assets although growth assets have been performing well.
Mortgage funds again had the strongest inflow, attracting $35.9 million. Cash wasn’t too far behind at $27.4 million and ‘other’ funds, which includes the new ING Diversified Yield Fund formed well. (Morningstar says the ING fund has a $60.6 million inflow during the quarter).
By contrast international equity funds only pulled in $18.8 million and much of this was due to good returns rather than investors choice.
Even with an improvement in returns and a return of some investor confidence, not all managers achieved a positive result for the quarter.
Less than half of the 23 fund managers surveyed by Morningstar recorded positive overall net inflows to their retail managed funds over both the quarter and year.
Of those, which did, the highest annual total inflow was attracted by ASB Investments ($271.4 million), reflecting the continued success of its residential mortgage trust.
Highest net outflow from retail managed funds for the year was from Tower ($110.8 million outflow), due primarily to transfers to mastertrusts done in previous quarters. AMP ($86.1 million), Asteron ($68.4 million), and BNZ ($66.2 million) also had heavy annual outflows, stemming primarily from strong outflows in the two quarters of 2003 when investor confidence was low.
ING/ANZ had the highest net inflow for the December quarter ($41.8 million) due to the popularity of their High Yield fund, followed by National Bank ($29.1 million) with the Thoroughbred Cash fund.
The five largest retail fund managers together account for 67.4% of total retail managed fund net assets at December, while the 10 largest retail fund managers together accounted for 94% of total retail managed fund assets.
There was not a lot of surprise on the product front. Unit trusts and group investment funds got the money, There was an overall net outflow of $15.2 million from superannuation trusts, (lower than previous quarters) and insurance bonds shrunk by $34.9 million.
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