Property returns shine

By Phil Boeyen, ShareChat Business News Editor

Tuesday 23rd April 2002

The stronger New Zealand dollar dampened first quarter returns from overseas shares but property prospered according to the latest data from AMP Henderson Global Investors (NZSE: AMP).

The fund manager says property returned 2.4% in the three months ended March and scored an impressive 10.6% on an annual basis for the year ended March.

"It's been a great year for New Zealand property," says Paul Dyer of AMP Henderson.

"Industrial and prime commercial property have both had good years, but the real winner has been local retail property with Botany Town Centre and Lynnmall providing strong yields."

Mr Dyer says that after a year of strong growth in 2001, the local share market appeared to take a rest over the first quarter of 2002 with passive and active NZ funds delivering returns of 2.1% and 0.8% respectively.

"We continue to believe that there are good investment opportunities in the New Zealand market, particularly in the mid cap stocks which are trading at discounts compared to their offshore counterparts."

By contrast the fund manager says the strengthening New Zealand dollar and global economic unease impacted on funds with international equity exposure.

"The profound difference between hedged and unhedged passive global figures, tells a clear currency story. The NZ dollar has strengthened 8% against the UK pound and 5.8% against the US dollar, effectively removing any upside from mildly buoyant offshore markets."

Mr Dyer says passive global shares returned -5.2 % for the quarter, while hedged passive global shares returned 0.9%.

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