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


Markets fire on all cylinders

14 October 2003

Markets fire on all cylinders

Strong returns in the September quarter capped a great year for investors. In the twelve months to 30 September 2003, AMP Henderson’s Low, Medium and High risk balanced funds returned 9.3%, 11.3% and 18.3% respectively.

The highest returns have been to share funds. Over the past year the MSCI, hedged to the NZ$, returned 24.3%. New Zealand shares have enjoyed similar buoyancy with AMP Henderson’s Strategic Equity Growth fund gaining 20.2% in the year to September.

In the September quarter New Zealand equities achieved a return of 3.7%. Global equities achieved 5.1% on a currency hedged basis and 3.0% unhedged.

‘In late 2002 and early 2003 there were a number of significant threats hanging over the global economy. As those risks have abated, investor confidence has increased. In general the appetite for risk has improved and this has greatly benefited the prices of risky assets’ said Mr Paul Dyer, Chief Investment Officer of AMP Henderson, New Zealand’s largest fund manager.

‘However, it is important to keep these gains in perspective. Markets have rebounded from deeply oversold levels. Returns such as we have enjoyed in the past twelve months are well above sustainable levels’ said Mr Dyer.

Fixed income markets have also enjoyed healthy returns. Over the past year AMP Henderson’s Global Fixed Income fund returned 9.6%. New Zealand Fixed Interest was slightly lower at 8.1%

‘The past year has seen fixed income investors increasingly accept that low interest rates will remain for an extended period. This has been highly beneficial for prices of longer maturity debt. In addition, the growing optimism about growth in most regions has benefited non-sovereign debt in recent months. Spreads between corporate and Government debt have contracted as investors have reassessed downwards their perceived risks of default’ said Mr Dyer.

However, fixed income returns for the September quarter were poorer. The New Zealand fund experienced a small loss as yields rose marginally.

‘As with sharemarkets, this illustrates the need for investors to focus on sustainable returns. New Zealand interest rates are now around 6%, and this is indicative of the future returns from investment grade assets. Returns in this sector have been very strong over the previous three years but this is unlikely to continue’ said Mr Dyer.

Movements in the New Zealand dollar were not a large factor over the past three months.

‘The New Zealand currency has shown a rare period of stability. We continue to see the currency as moderately above its longer run fair valuation. However, this situation may persist for some time. New Zealand interest rates remain well above world levels. In addition, the US dollar shows similar signs of over-valuation. It remains to be seen whether the New Zealand dollar or the US dollar corrects itself first’ said Mr Dyer.

New Zealand property continued its solid performance and delivered 2.4% for the quarter and 10.3% over the past year.

‘We are witnessing increased client interest in property. Having been out of the limelight in recent years, investors are now appreciating the attractive yields and stability of income provided by these assets’ said Mr Dyer.

This is not simply a New Zealand trend. AMP Henderson believes there is a strong case for investment in Global Property Securities and began to offer this unique product to its superannuation clients at the beginning of the quarter. The returns for first quarter were an impressive 7.2%.

‘We believe that global property will increasingly form an important part of an investor’s portfolio as a result of the many diversification benefits it offers’ said Mr Dyer.

Investment returns

To 30 September 2003
Quarter Return To 30 September 2003
Annual Return
Individual Sectors – Before Tax

Strategic Equity Growth
NZ Equities Active
Global Equities Active
New Zealand Fixed Interest
Global Fixed Interest


Managed Funds – Before Tax

Low Risk Fund
Medium Risk Fund
High Risk Fund


Passive Funds – Before Tax

Global Equities – Passive
Global Equities – Passive Hedged
NZ Equities – Passive


Index Performance

MSCI Gross Index
MSCI Gross Hedged Index
NZSX50/NZSE 40 (composite)
NZSX Portfolio Composite Index
CSFB Bills Gross Index
CSFB Bond Index
Global Bond Index (Lehman)



© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>