AMP Capital: ‘Sit tight in balanced funds’

Tuesday 27 January 2009

AMP Capital: ‘Sit tight in balanced funds’ despite gruelling times

Cash may have outperformed recently, but investors should sit tight in their balanced funds, said Jason Wong, Head of Investment Strategy for AMP Capital Investors.

For the quarter to 31 December, AMP Capital’s conservative diversified fund returned 2.4% (6.8% for the year), its balanced diversified fund returned -57% (-10.5% for the year), and its growth diversified fund returned -13.8% (-24.5% for the year).

Of the individual asset classes, defensive sectors performed more strongly. New Zealand fixed interest was the high performer for the quarter and year returning 8.5% and 20.5% respectively. Cash returned 2.2% for the quarter and 9.2%for the year.

Mr Wong said despite growth assets continuing to perform poorly and the world experiencing one of the worst financial market crises in history, long-term investors are still ahead.

“On the positive side, the global financial crisis is no longer news and markets have moved towards pricing in this scenario. It is unlikely that negative share price movements in 2009 will be to the scale seen in the last year.”

“Governments and monetary authorities are easing policy aggressively and inflation is no longer a concern over the next 12 to 18 months,” he said. “The challenge is to work out how much of the bad news is priced in. We are maintaining a defensive stance while keeping an eye out for the opportunities a bear market can offer,” Mr Wong said.

ENDS

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