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Investors In Managed Funds Enjoy Healthy Returns


Investors In NZ Managed Funds Enjoy Healthy Returns

As per FundSource’s September report on managed fund performances, investors in NZ managed funds enjoyed gains across the board.

“A number of factors have contributed to this. Investors in funds of NZ shares have largely benefited from corporate activity such as mergers and acquisitions as well as private equity interest – meaning it is driven by momentum in the share market. On the other hand investors in international shares are continuing to see growth from the fundamental strength in corporate earnings that we have seen in the last few years, although those returns have been somewhat dampened by the recent strength in the NZ dollar”, says Binu Paul, General Manager at

FundSource a subsidiary of the New Zealand Exchange Limited (NZX). As a result of positive returns from a broad range of asset classes, investors in diversified growth funds have seen average returns of over 10% after tax and fees every year for the last three years.

“Investors are obviously reaping the benefits of having diversified across a number of assets, having done that through professionally managed funds”, says Paul. Equity funds in general saw the strongest gains in September with the NZ Equity fund sector leading the way. NZ Equity Active, NZ Equity Passive, and NZ Equity Australasian averaged 1.67%, 1.65% and 1.00% respectively, thus bringing annual returns after tax and fees to 9.9%, 5.2% and 9.0% respectively.

Other domestic asset sectors also saw positive September returns with the NZ Property sector averaging 0.9%, NZ Mortgages 0.4% and NZ Fixed Interest 0.4%. Meanwhile, funds of Australian shares fared poorly with the benchmark S&P/ASX Accum 200 Index experiencing negative returns (in New Zealand dollar terms) in September. The following is a summary of key investment sector performances for this month:

International Equity (Global) Unit Trusts

Following a month of patchy performance in August, the International Equity (Global) sector recorded on average of a positive 0.6% in September. Thus on average investors in International Equity (Global) funds have seen returns of 10.2% per annum over the last 3 years and 14.3% over the last 12 months.


New Zealand Equity (Active) Unit Trusts The NZ Equity sector saw across the board gains with NZ Equity Active and the NZ Equity Passive sectors returning an average of 1.66% for the month. The top performing NZ Equity Active fund produced 2.7% in September. The 3 year average return for NZ Equity Active funds now sits at 13%.

Diversified Funds Building on the strong performances from both International and NZ equities, all the Diversified sectors recorded healthy gains in September.

-Diversified Growth funds, with their more aggressive asset allocation have gained 0.7% during September and maintained their 9.1% return over the last 12 months.

-Diversified Balanced funds averaged 0.5% in September and averaged returns of 7.4% over the last 12 months.

-Diversified Defensive funds, the most conservative in nature, posted returns ahead of Diversified Balanced funds at 0.6% for the month, with average returns of 5.3% over the 12 month period to September 30th. All three Diversified sectors continue to provide average annualised performance figures of between 5% and 10% over the past three years, net of tax and fees.

Summary Sector Average 3 year Performance (net of tax and fees) NZ Equity 13% International Equity (Global) 10% Diversified 8% NZ Fixed Interest 3.5% FundSource’s managed fund returns are provided net of all relevant fees and taxes, reflecting the returns received by an investor in the fund.


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