Australasian Share Approach Benefits Investors
Three years after becoming the first major investment manager to introduce an Australasian share portfolio to the New Zealand market, Colonial First State Senior Portfolio Manager Gerry Verhaart says the portfolio is providing good returns for investors.
For the three years ended 30 June 2000, Colonial First State's Australasian share portfolio produced a gross return of more than 10 per cent, compared with the NZSE40 gross index of nearly one per cent.
Mr Verhaart says taking an Australasian approach rather than just a New Zealand approach offers investors the ability to access a much broader range of companies and sectors while improving the liquidity in the portfolio.
"Australia obviously has a much bigger economy than New Zealand. By combining the two, we have been able to provide investors with an investment vehicle that has more diversity and greater opportunity for growth."
Mr Verhaart says Colonial First State's Australasian portfolio also provided some excellent returns for investors during the volatile June quarter.
"The portfolio produced a gross return of over 11.5 per cent for the three months ended 30 June 2000, compared with the NZSE40 gross index of 1.45 per cent."
"It's rewarding to produce good returns for our investors, especially in periods of high sharemarket volatility."
The good results were attributable to Colonial First State's disciplined investment approach, investing in quality companies at sensible prices, which prevented it from participating in the dot.com hype which raged over the latter half of 1999 and the first quarter of this year.
"Many internet companies were simply not showing any likelihood of producing a level of earnings to justify their prices."
Colonial First State's Australasian portfolio is now benefiting from its select holdings in quality technology companies, for example Australian smartcard manufacturer ERG, which performed strongly in June.
The Tasman Developing Companies Trust, which was set up in May 1999 to give investors access to the growth opportunities of small to medium sized companies on both sides of the Tasman, delivered a gross return of 37.5 per cent, for the year ended 30 June 2000, up 34.2 per cent on the NZSE40 gross index of 3.3 per cent.
Mr Verhaart says although Colonial First State's investment approach can lead to a divergence in performance from the index in the short term, over the long term they expect to produce consistent returns above the index.
"All we do is focus on investing in those quality assets which we believe will provide the best returns for our investors."