More good news for funds
More evidence is emerging that money flows into managed funds are improving - although still modest in size.
Friday, February 2nd 2007, 6:55AM
"This is the first time that net fund flows on a rolling twelve month period have been positive since June 2002," FundSource general manager Binu Paul says.
“Moderate as it may be, it is definitely positive news for the industry, although we are nowhere near the trends of the late 90’s when annual net inflows were in the range of $1 billion dollars."
He says that the future looks better due to the changes to investment taxation and savings initiatives such as the KiwiSaver.
“KiwiSaver especially will create fundamental shifts in the savings mindset as there are very significant tax savings and investment benefits for all employees and employers alike. For a significant number of employees and employers the range of benefits will be very compelling to participate in Kiwisaver.
The turnaround in fund flow trends to positive territory was assisted by investor inflows in both the December and June quarters ($4.5m and $25.4m respectively). The recent improvement in fund flows can be attributed to a number of factors, including the strong returns managed funds have experienced over the past few years.
On a sector basis, investors preferred international fixed interest and New Zealand property over cash, diversified and global international equity.
Returns in the quarter assisted growth. With diversified balanced funds returning on average 3.1% for the quarter, while NZ share and property funds returned, on average, 8.6% and 7.9% respectively (net of tax and management fees).
ING, which includes ANZ the National Bank remains the largest manager with $4.82 billion, NZ Funds is second with $2.03 bill and ASB (including Jacques Martin) is next with $1.99 billion.
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