Managed funds boast good returns for the year
Managed funds have staged a significant recovery 12 months on from the end of the Iraq war.
Tuesday, April 20th 2004, 6:24AM
Average performance for active New Zealand funds in March was over 4%, which saw New Zealand equity fund managers returning on average 22% for the year.
The top performer was the AXA Australasian Selected Equities fund with 4.49% for the month and 24.73% for the year. It was closely followed by the BT NZ - NZ Plus Share fund with 24.06% for the year after a 3.85% return in March.
"There has been a combination of factors providing a catalyst for positive New Zealand equity fund return over the past year, including increased corporate activity, price/earnings ratio expansion and a general increase in appetite for risk by investors" FundSource business manager Tim Anderson says.
Since hitting multi-year lows around the commencement of Iraq War in mid-March 2003, global shares as measured by the MSCI World Free Gross have gained 13%.
International equity funds in the same period however, on average, have gained around 20% (after tax and fees).
For March, International equity funds returned more than 2% on average. This is a very positive turnaround for New Zealand investors after a prolonged period of negative returns, Anderson says.
Out performance was led by a sector specific fund, the Affinity Healthcare Worldwide Growth (31.4% for the year, 2.4% for the month). Other solid performers included the Guardian Global Equity Fund with an annual return of 26.32% and the ANZ World Equity Trust with 25.78%.
"The key to this 12 month return is that it coincides with the anniversary of the official end of the Iraqi war and therefore does not include the negative sentiment leading into the conflict.”
Anderson says fund flow figures suggest investors are returning to this sector.
Diversified funds also enjoyed strong growth both the quarter and the year.
Primarily on the back of positive equity market performance, balanced funds returned 1.55% in March, and 12.25% for the year.
As to be expected, growth orientated diversified funds performed better with a 1.96% over March and 15.5% for the year and defensive diversified funds had a 0.96% return in March and 6.86% return for the year.
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