Returns reasonable despite shake out in equities

Tuesday 17 April 2007

March quarter returns reasonable despite shake out in equities

The stellar returns experienced over the past year have been replaced by more modest returns in the first quarter of 2007 said Leo Krippner, Head of Investment Strategy for AMP Capital Investors.

“New Zealand property was still delivering robust returns although less so than the previous quarter – 7.8% for the quarter and 27.5% for the year.

“The March 2007 quarter, however, was marked by a shake out in equities which was sparked by the decline in the Chinese share market in late February and volatility was the name of the game with a strong January, a negative February and a rebound in March for diversified funds,” said Mr Krippner.

“AMP Capital’s lower risk diversified fund returned 1.8%, its medium risk diversified fund returned 2.3% and its high risk diversified fund returned 2.6% over the quarter. For the year to 31 March 2007, the low, medium and high equity diversified funds returned 7.7%, 11.0% and 13.7% respectively.

“Hedged global equities performed better than unhedged showing a quarterly return of 2.9% while the unhedged return for global equities was 0.6%. The annual return for hedged global equities was 20.7% and for unhedged global equities was -2.1%.

“Over the quarter the New Zealand share market underperformed global equities with a return of 2.6%,” Mr Krippner said. “However, New Zealand equities were still showing a strong annual return to 31 March of 21.7%

ENDS

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