Managed funds finish year on high

“A number of factors have contributed to all-round cheer for managed fund investors in 2006,” FundSource general manager Binu Paul says. “While this has primarily been underpinned by strong global growth, the New Zealand share market too has been especially resilient.”

He says that upcoming changes to how funds are taxed make managed funds “an even more exciting investment opportunity for investors.”

The International Equity (Regional) sector lead the way in November, bringing in the strongest gains of 2.9% on average for the month. One year returns for this sector are now at 28.5% after tax and fees. This sector has benefited as Asia-Pacific region (ex-Japan) and emerging market equity investments fared well over the month and the year to November.

The NZ Equity fund sector followed close behind in terms of performance. NZ Equity Active, NZ Equity Passive, and NZ Equity Australasian averaged 2.7%, 2.3% and 2.1% respectively, bringing annual returns for each sector (after tax and fees) to a corresponding 18.8%, 17.4% and 16.7%.

Diversified funds benefited from the strong International Equity (Regional) and New Zealand Equity returns, particularly over the one year period. Diversified Growth, Balanced and Defensive sectors have returned a notable 11.5%, 9.6% and 6.2% respectively over the twelve months to November.

On the income asset front, the NZ Mortgage sector returned 0.41% for November, NZ Fixed Interest returned 0.30% and cash returned 0.38%. These sectors have returned 5.1%, 3.8% and 4.5% over the one year period to November respectively. Meanwhile the NZ Property sector gained a positive 0.48% for the month of November, up a significant 12.5% for the year.