Kiwi fund investors stay cool during market meltdown
26th Feb 2019
Direct investors in aggregate remained upbeat during the worst December since the Great Depression for US stock markets, according to new data from managed fund platform, InvestNow.
InvestNow’s Mike Heath said an analysis of the InvestNow trading patterns during the December 2018 stock market crash shows overall members were net fund buyers over the period.
“Despite US and other share markets – including New Zealand - experiencing their worst volatility since the global financial crisis (GFC) over December, InvestNow members collectively kept investing,” Heath said. “The data suggests InvestNow members are using the platform to create long-term portfolios rather than dabble in short-term trades.”
However, the December volatility did spark a slight uptick in both buying and selling on InvestNow with some interesting behavioural differences emerging between passive and active fund sectors.
Mike Heath said the InvestNow platform saw active fund trading fluctuate higher than normal across both buying and selling through the December volatility.
“But interestingly, passive fund buy orders stayed largely on trend during December while sell orders for index funds moved around over the month in line with active funds – in fact, passive fund sales were higher than active for the latter part of the month,” Mike Heath said. “The observation ties in with behavioural economic research that shows investors tend to be more loss-averse than risk-taking – especially when real market volatility hits.”
He said many of the 10,000 plus InvestNow members allocate to both active and passive funds depending on the asset class.
The importance of asset class diversification was illustrated by the latest performance data for funds on InvestNow, Mike Heath said.
Most funds on the platform were in the red for December while about half recorded positive returns in 2018. Just about all funds listed on InvestNow, though, were up over multi-year periods.
“It’s clear, however, that asset class performance has varied over different time periods,” Mike Heath said. “For instance, during December listed property and fixed income funds generally outperformed while Australasian equities funds reported the highest returns over three- and five-year periods.”
The platform currently boasts almost 100 individual managed funds covering most asset classes including the most-recently added Antipodes Global Long Fund – now offered as a portfolio investment entity (PIE).
“Antipodes is a well-respected Australian-based active international shares manager with a wide following among investment advisers in New Zealand,” Mike Heath said. “We expect it will be popular among InvestNow members too.”
InvestNow is also investigating adding additional new index funds offered by the NZX-owned manager, Smartshares. Mike Heath said InvestNow decided to add more new Smartshares funds after polling members for their preferred options.
“While we don’t want to offer every fund in the New Zealand market, InvestNow is about giving Kiwis the choice of investing in a wide range of products and in the styles they want,” he said.
InvestNow is 100% owned by Implemented Investment Solutions (www.iisolutions.co.nz), a Wellington-based investment industry specialist business. InvestNow is a Financial Service Provider (FSP534448).
InvestNow provides investors, who know what they want to do, the ability to directly invest in a compelling range of funds from both NZ and Global fund managers - namely AMP Capital, ANZ Investments, Elevation Capital, Devon Funds Management, Fisher Funds, Harbour Asset Management, Hunter Investment management, India Avenue Investment Management, Legg Mason Global Asset Management, Mint Asset Management, Morphic Asset Management, Nikko Asset Management, Pathfinder, Russell Investments, Salt Funds Management, Smartshares and Vanguard.
In October 2018 InvestNow added bank term deposits to it’s service. Launching initially with the BNZ and SBS Bank, they are working with all the other major banks in NZ to bring them to their service.
Without the need for a middleman, and our no-advice direct investment service, InvestNow does not charge any administration or transaction fees. Investors can manage their portfolios, investing in PIE funds, Listed PIE Funds (Exchange Traded Funds – ETFS) and Australian Unit Trusts, 24/7. The minimum investment, in a single fund is $50, if part of a regular investment plan, or $250 for one-off purchases.
In April 2018 the business took over the direct fund investment business of Rabobank NZ.
InvestNow provides investment accounts for NZ Individuals, Joint Accounts, Family Trusts and NZ Companies.
As an additional layer of online security, we utilise two-factor-authentication for customers when logging in to their accounts. We will send the customer a unique Passcode as part of the login process, for which they can select e-mail or text messaging