Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Managed Funds Back in Favour With Investors

28 July 2006


Managed Funds Back in Favour With Investors

FundSource Research’s latest quarterly Industry Trends and Market Composition report highlights that investors are showing an increasing appetite for managed funds. In the three months to June, the managed funds industry saw net fund inflows of $22 million, the first positive flow in any quarter since Dec 2003.

Binu Paul, general manager at FundSource says “This is a trend that we have seen developing from mid-2005 and it is very encouraging to see fund flows finally turn up to positive territory. It is also typical of investor behaviour as it comes after a sustained and prolonged period of strong performance especially from international shares. Anecdotal evidence also points to stresses in the finance company debenture sector that have caused concern to those investors, encouraging them to shift their preference to managed fund products, which typically have materially lower risks”.

The report which tracks trends in the New Zealand retail managed fund industry across unit trusts, group investment funds, superannuation funds, insurance bonds and Australian unit trusts promoted by all NZ based fund managers, now shows Total Net Funds under Management (NFUM) sitting just shy of $22 billion, a record high. This comes even as international shares suffered from a month of poor performance in May.

In very broad terms, investors preferred NZ and Australian unit trusts which saw net inflows of around $75 million for the three months to June, at the expense of Insurance bonds and Superannuation products. In terms of asset classes diversified funds, property funds and international fixed interest funds were the biggest gainers.

While NZ Funds continued to dominate the Unit Trust sector with over 20% share of total funds under management, the Superannuation sector continues to be dominated by ING (including National Bank and ANZ) with a 23% share of that sector.

Following are some of the highlights from the report.


The table below highlights some of the key trends in fund flows across sectors, relative to the previous quarter:

Net Fund Flows in $Million

Sector Jun-06 Quarter Mar-06 Quarter

Int'l Fixed Interest 107.1 53.9
NZ Diversified 20.2 -28.3
NZ Property 10.6 -6.2
NZ Mortgage 3.3 1.4
Global Int'l Equity -1.7 15.7
Australasian Equity -12.2 -43.1
NZ Cash -95.3 12

International Fixed Interest funds experienced the largest positive flows of $107.1m for the quarter while the NZ Cash sector saw the biggest quarter-on-quarter swing in fund flows, going from positive $12.0m last quarter to negative $95.3m this quarter.

In terms of legal structure, Australian Unit Trusts (AUTs) and Unit Trusts (UTs) were the most popular with inflows of $42.1m and $32.3m respectively. Group Investment Funds (GIFs) were less popular this quarter, with flows going from positive $80.5m last quarter to negative $4.1m.


Total Net Funds Under Management (NFUM) grew by a mild 0.5%, or $116.6m over the June quarter, compared to 4.3% ($907.7m) for the March quarter, despite positive fund flows in to the industry.

Total NFUM now stands at a record high of $ $21.9 billion.

Sectors adding to the growth in NFUM included the NZ Property and International Fixed Interest sectors, at $135.5m and $121.8m respectively. NZ Property was the strongest performing domestic sector over the June quarter, while the International Fixed Interest sector benefited from strong positive fund flows.

ING (NZ) Ltd, which also manages the National Bank and ANZ range of funds, retained the top spot, in terms of net funds under management.


Manager Funds Under Management $ Billon

ING (incl. ANZ & NBNZ) 4.7
NZ Funds Mgmt. 2.01
AMP 1.9
ASB Bank 1.86
AXA (incl. BNZ) 1.74

FundSource’s managed fund returns are provided net of all relevant fees and taxes, reflecting the returns received by an investor in the fund.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>


Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news