NZ market takes a bow

By Phil Boeyen, ShareChat Business News Editor

Friday 20th April 2001

New Zealand shares have been rated the best performing asset class for the first three months of the year according to AMP Global Henderson Investor's.

The fund manager says the local market shrugged off global concerns and posted a 7.8% return during the period, backed up by a rebound in Telecom's (NZSE: TEL) share price, falling interest rates and increased takeover activity, notably surrounding the Fletcher Group.

AMP Henderson says its passive and active New Zealand share funds delivered gross returns of 8.5% and 7.3% respectively for the March quarter and contrasted with negative 7.6% return from global shares.

Fixed interest returns were also strong, returning 12.2%.

Chief investment officer, Chris Wozniak, says the quarter's results highlight the need for diversification and the need to have some exposure to local assets.

"Having New Zealand shares in a balanced portfolio has certainly been worthwhile during the last quarter."

Mr Wozniak says while a negative return for many of the service's balanced fund clients will come as a bit of a shock, particularly after a five-year global equity rally, research shows a balanced fund can expect a negative return once every 5-6 years on average.

"Looking ahead, the key issue for investors is the health of the global economy and equity markets. We believe that most markets, including the United States, are now reasonably priced.

"The global technology bubble has well and truly burst with the Nasdaq down almost two-thirds from its earlier peak."

Mr Wozniak says it is important to remember that technology is just one sector, and that the bulk of the global equity market has been quite stable.

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