News Round Up

Monday, October 9th 2006, 7:07AM

Overall investor confidence rose in the third quarter of 2006, up three points to a net 19%. However confidence in two areas took a big hit.

The quarterly ASB Investor Confidence survey asks people which asset classes they expect will give them the best returns. Term deposits and bank savings accounts, which recorded big increases in recent surveys, have fallen four percent and one percent respectively.

“It is a real surprise to see drops in confidence with savings and term deposits, given the rates currently available in the market and the continued success of high interest call accounts,” ASB head of investment services Jonathan Beale says.

Residential rental property remains the asset class expected to give the best return and expectations about the returns from commercial property continue to rise.

KiwiSaver a little unknown

The Investor Confidence Report also asked respondents who had investments if they were aware of KiwiSaver. Just over two thirds of those with investments said yes.

“While there is no benchmark, you would expect a high percentage of people with investments to be aware of KiwiSaver,” Beale says. “Only half of those under 30 years of age knew what KiwiSaver was, while over 70% of those aged over 40 were aware of it.”

Beale says this is an issue that that may need to be addressed as KiwiSaver is rolled out.

New OM-IP given S&P tick
Standard & Poor's Fund Services has given an 'investment grade' rating to Man Investments’ Series 2 OM-IP 15seven fund.

The fund, which is the 27th OM-IP product, will invest in a leveraged combination of the AHL Diversified Program and the RMF Portfolio over a seven-year term.

Its initial make-up will be 75% in a managed futures fund and 45% in fund-of-hedge-fund portfolios. This offers a balanced portfolio with the potential for increased reward with reduced volatility, S&P says."

Two more warrants added
Two new series of Telecom warrants, from UBS Securities New Zealand, are now listed in the NZX.

The NZX says there has been significant growth in the trading of warrants in 2006, with 5,934 trades and $70 million in value traded year to date. These trades have a positive impact on the underlying liquidity of the shares they represent.

Warrants are primarily used by investors as a means of leveraging their portfolio. They enable investors to essentially 'lay-by' their shares by putting down an initial, partial payment, receiving entitlements (eg: dividends) throughout the lifecycle of the warrant, and paying a final instalment on the maturity date.

There are now 30 warrants on the NZX.

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