19th July 2004
2004 Half Year Fund Performance Strength Continues
Figures released by investment research company FundSource reveal that equity fund investors have continued their run of
positive returns in the first half of 2004. International equity funds saw solid average growth of just under 5% in the
six months and 12% in the year to 30 June 2004 though it was NZ Equity funds leading the way, with active funds
increasing just under 6% this half year and 14.5% for the full year. Following is a summary of the main investment
sector performances:
New Zealand Equity (Active) Unit Trusts
NZ investors currently have over $850 million in NZ equity funds. Average performances for NZ Equity active funds in
June were up 5.93%, New Zealand equity fund managers returned on average 14.55% for the year versus the NZX50 Gross
(33%) return of 14.28%. Top performer was the Fisher Funds NZ Growth fund with 21.39% for the year (8.38% for 6months),
while AXA Australasian Selected Equities rose 15.77% for the year after a 4.79% return in the half year.
"Short-term performances in the NZ Equity sector continue to reflect a persistently buoyant New Zealand economy. What we
find of considerable note however is that over the medium and longer terms, NZ Equity funds continue to add value for
their investors. Over a five year period for example, active NZ Equity funds have returned 7.28% (post tax and fees)
relative to the NZX50 Gross Index (33%) returning 6.18%." says Tim Anderson, General Manager at FundSource.
No NZ Equity funds reported returns under 10% for the year.
International Equity (Global) Unit Trust NZ investors currently have $2.4billion invested in international equity funds.
This year, international equity funds have slightly underperformed the index as measured by the MSCI World Free Gross
(33%) with average returns of 4.77% versus 5.11%. While the index however gained 10% in the year to June 30th 2004,
international equity funds in the same period gained over 12% (after tax and fees) on average.
Website: www.fundsource.co.nz Out performance was led by FundSource’s 2003 international equity fund of the year, the
BNZ International Equity Trust (18% for the year, 5.56% for the half year). Other solid performers for the year included
the ING International Share Fund (16.08%) and the ANZ World Equity Trust with 16.05% returns. "Sustained positive
performances in International equity funds continue to be encouraging for investors. Certainly, the harsh reality of
international equity investing is still fresh in many minds, but with a historic bear market now behind us, investors
are looking forward to strong offshore economic conditions realising further positive international equity returns."
says Tim Anderson General Manager at FundSource.
Diversified Funds
The largest managed fund sector with over $7billion of New Zealanders’ money invested, Diversified funds also enjoyed
strong growth in the year to June 30 2004. Primarily on the back of positive equity market performance, balanced funds
returned 2.75% in the half year, and 7.32% for the year. As to be expected with a higher allocation to equities, growth
orientated diversified funds performed better with a 3.84% over the six months and 9.69% for the year.
"Overall the funds management industry is pleased to see a continuation of the strong performances experienced in 2003.
With these sustained positive performances in both funds and the underlying market, we are continuing to notice an
increased appetite for risk, and thus a return to share investing which, over the long term can only be a positive thing
for investor returns." says Tim Anderson, General Manager at FundSource.
ENDS