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NZ and Int. Equity Continue Positive Momentum


NZ and International Equity Continue Positive Momentum

Figures released by investment research company FundSource indicate that equity investors continue to record significant positive performances in their equity funds, following what have been recent record increases in performance. International equity funds saw solid growth of over 12% in the year to 31 May 2004 while leading the way again were NZ Equity funds, with active funds increasing 16% and their passive counterparts growing a creditable 18%.

Following is a summary of the main investment sector performances:

New Zealand Equity (Active) Unit Trusts

While average performance for active funds in May was flat, New Zealand equity fund managers returned on average 16% for the year. Top performer was the Fisher Funds NZ Growth fund 22.54% for the year (7.5% quarter, 0.2% month), while AXA Australasian Selected Equities rose 16.72% for the year after a 3.50% return in the quarter (-1.38% month).

"Performances in the NZ Equity sector continue to be extremely strong, reflecting a persistently buoyant New Zealand economy. With an economy continuing to be stronger than many commentators expected, it has translated into higher company profits and ultimately, higher company values." says Tim Anderson, General Manager at FundSource.

All NZ Equity funds reported returns over 13% for the year.

International Equity (Global) Unit Trust

While global shares as measured by the MSCI World Free Gross (33%) gained 9% in the year to May 31st 2004, international equity funds in the same period gained over 12% (after tax and fees) on average.

Out performance was led by a sector specific fund, the Affinity Healthcare Worldwide Growth (22.66% for the year, 7.38% for the quarter). Other solid performers for the year included the BNZ International Equity Fund (18.73%) and the ANZ World Equity Trust with 16% returns.

"International equities have enjoyed a very positive period since March of last year with corporate and economic activity strengthening across the board. These latest positive figures show we are past the ‘turnaround stage’ and have now entered a period of consistent returns. Importantly, research shows that investors returning to international equities are being well compensated for their decision." says Tim Anderson General Manager at FundSource.

Diversified Funds

The largest managed fund sector with over $7billion of New Zealanders’ money invested, Diversified funds were flat in May but enjoyed strong growth in the year to May 31 2004.

Primarily on the back of positive equity market performance, balanced funds returned 1.5% in the quarter, and 7.93% for the year. As to be expected with a higher allocation to equities, growth orientated diversified funds performed better with a 2.19% over the three months and 10.08% for the year while defensive diversified funds had a 0.85% return in the quarter and 4% return for the year.

"Overall we expect to see a continuation of 'normality' in managed funds after recent equity market volatility, both on the down and up sides. While we do not expect to see the same volatility repeated in the short term, equities continue to be attractive for those wanting exposure to growth orientated investments" says Tim Anderson, General Manager at FundSource.

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