News Round Up

Monday, September 13th 2004, 6:43AM

The launch of index funds by the NZX has revived the debate of active versus passive investment management. Tower made its views on the NZX MOZZY fund clear earlier last week and now Russell Investment has added its perspective.

“Investors should look carefully at the full range of investment options before buying into the low fees, high returns argument which is being promoted with the NZX,” Russell Investment Group managing director Edward Schuck says.

He says that lots of investors and managers actively trade, but don’t have the skills or information needed to beat the market.

One challenge for investors was selecting active managers who make the best decisions, and also knowing when they aren’t good anymore.

“Good active managers do produce additional returns and the tax treatment need not be as onerous as the NZX makes it out to be. Australian unit trust products like those run by Russell offer tax efficient means of accessing active managers,” Schuck says.

Dorchester launches property fund

The Dorchester Property Trust was launched last week. The fund is aiming to raise $12.75 million and its first investment will be the Auckland Club Tower, which is also the head office for Dorchester.

The fund is forecasting a gross annualised yield of 9.1% for the six months ending 31 Mar 2005 and 9.2% for the 12 months ending 31 March 2006.

Dorchester says the yield is significantly higher than the NZ listed property sector which is currently around 8.3% pa gross (weighted average).

Chasing Access customers
Following the collapse of Access Brokerage the two remain online discount brokers have been busy touting their offers. ASB Securities has given investors an undertaking that it will not raise its Internet brokerage rates as a result of the Access Brokerage collapse.

A number of investors have expressed concern that the rapid demise of Access may lead to higher Internet broking fees.

Tim Preston, Managing Director ASB Securities, says this will not be the case and as long as no additional fees or costs outside its control are imposed, ASB Securities has no plans to increase its current Internet rates.

Likewise Direct Broking has been saying it’s business as usual.

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