Final quarter lifts a lean year for fund managers

By Phil Boeyen, ShareChat Business News Editor

Thursday 31st January 2002

New Zealand's wholesale superannuation fund managers had a much better December quarter although annual returns weren't up to much, new figures show.

According to Mercer Investment Consulting's December quarter survey, annual returns varied greatly among fund managers in 2001, ranging from a gross 7% from Colonial First State to a negative 4.5 % from Westpac Trust Investment Management.

The median for the twelve months from the 13 fund managers surveyed was just 1.4% before tax and fees.

Despite the straggling annual result the December quarter picked up for all managers, with returns ranging from 4.5% at AMP Henderson Global Investors up to 9.4% at Alliance Capital Management.

"The September 11 terrorist attacks sent share markets around the world plunging amid fears of a global recession," says Mercer spokesman, Louis Boulanger.

"Subsequent to this they have rebounded, with all major indices in the US, Canada, Australia and New Zealand ending the year above pre-September 11 levels. New Zealand shares delivered a 12.2 % return. Overseas shares posted a positive 10.9% return for the quarter in NZ dollar terms, outperforming overseas fixed interest investments by 9.9% over the period."

Mr Boulanger says the survey shows that in the volatile global investment environment, the New Zealand stock market has continued to outperform its global counterparts.

"Over the past quarter, it outperformed overseas shares (MSCI Hedged in NZD) by 1.3%. Over the past year, the New Zealand stockmarket has been one of the best performing markets in the world."

Mr Boulanger also points out the change in allocations among fund managers in 2001 compared to 1998, particularly in overseas markets.

Figures show that three years ago only two managers had more than 28.5% of funds in overseas shares but since then fund managers had increased their overseas exposure by an average of 13.5%, with all having at least 30% of funds in overseas holdings.

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