Eriksen Master Trust survey

The range of returns for all three categories of fund has widened in the past quarter. This shows how unpredictable markets can be and also reflects the effect of different investment styles.

Tuesday, July 27th 1999, 12:00AM

Falling interest rates have reduced the returns for balanced and conservative funds in the three months to June 30. New Zealand equities funds performed well. With inflation for the year -0.4 per cent funds performed well with an 8 per cent real rate of return on average. This was also over 4 per cent pa better than the cash rate.
The Global Retirement Trust which is a multi-employer master trust for the state sector is included in the survey for the first time this quarter. The GRT was set up to provide a superannuation vehicle for public servants when the Government Superannuation Fund was closed to new entrants in 1992.

Armstrong Jones is launching a new wholesale master trust at the end of August. The Mercer Retirement Trust has also been set up. It will be interesting to see how Mercer Consultants manage its conflict of interest.
The range of returns for all three categories of fund has widened. This shows how unpredictable markets can be and also reflects the effect of different investment styles. It is important to select the right managers and funds to meet your risk profile and return aspirations. We expect the rationalisation of financial services institutions will continue on a global basis.
The Tower, AMP and WestpacTrust master trusts are growing strongly as more employers pull out of trying to battle with red tape and stop running their own schemes. The number of stand alone employer sponsored schemes is still falling at more than 10 per cent pa despite more employers realising how important saving for retirement is for their staff.
Statistics New Zealand are planning to distort the CPI figures to exclude the costs of housing and mortgage interest from their figures. This will help the Reserve Bank rationalise not having to increase interest rates if there is another housing boom.
Employers have adapted to returning employees income to the IRD monthly despite computer difficulties. Having monthly data on earnings makes the implementation of a compulsory superannuation scheme a very simple matter because the IRD has the ability to generate or reconcile the contributions monthly.
The Super 2000 Taskforce launched its publicity campaign late in July. It is keen to hear from concerned New Zealanders about the issue of retirement savings. Whilst the Taskforce represents yet another committee formed to resolve the issue, time is running out. How different the New Zealand economy would be if Sir Rob Muldoon had not bribed the electorate to scrap the Labour compulsory superannuation scheme of 1975. Will the wheel turn full circle in November?

Fund Name	Size $ million	Annual Returns (Net of Tax & Expenses)
Fund Name	Size $ million	1 Year	2 Year	3 Year	4 Year
Growth Funds
Colonial Life NZ Equity Management	0.2	13.9	0.2	5.9	6.0
Tower Focus NZ Shares	2.1	13.0	1.4	7.9	8.5
Jacques Martin NZ Growth Fund	27.5	12.4	10.0	11.2	11.0
AMP High Equity	52.6	12.4	11.3	12.6	11.7
Global Retirement Trust Growth	5.9	11.6	10.0	11.4	10.0
WestpacTrust Dynamic	172.7	8.3	7.4	8.3	7.2
Jacques Martin NZ Asset Growth	11.3	7.9
Colonial Life International Equities	1.3	7.8	8.4	10.4	11.5
Colonial Life Balanced Growth	16.1	7.7	5.0	8.2	8.1
Tower BT Managed Growth		7.6	5.0	8.0	8.8
National Mutual Spread Managers		7.5	5.2	7.1	7.1
Colonial Life Special Values	3.9	6.6	6.1	9.3	9.6
Tower Explorer	1.1	6.2	7.9	10.5	10.4
Tower Pioneer	4.8	5.0	8.0	10.0	9.5
Tower Focus International Shares	7.2	3.9	12.7	13.6	14.1
All Growth Funds	362.3	9.0	7.8	9.2	8.5
Balanced Funds
AMP ANZ Balanced	55.2	10.6	6.6	8.7	8.8
AMP Indexed	9.8	10.3	6.2	7.5	6.9
Armstrong Jones SIL Balanced	303.0	8.9	8.8	10.8	10.1
Global Retirement Trust Balanced	11.4	8.8	8.2	9.6	8.2
Jacques Martin NZ Balanced	68.4	8.7	7.1	8.6	8.1
AMP Balanced	243.2	8.5	7.8	9.2	8.8
National Mutual Managed	29.7	8.1	5.2	7.2	7.1
National Mutual Balanced	22.8	7.6	5.1	7.1	7.0
Royal Sun Alliance Managed Fund	88.1	7.5	6.5	8.5	7.9
WestpacTrust Balanced	282.3	7.4	6.6	7.1	6.3
AMP BT	17.9	6.9	4.8	7.4	8.1
Tower Investment Linked	34.3	5.0	7.8	9.5	9.3
Tower Opportunity	3.1	4.8	7.0	8.8	8.3
All Balanced Funds	1,169.1	8.2	7.4	8.9	8.3
Conservative Funds
Jacques Martin NZ Capital Stable	38.7	6.8	6.5	7.3	6.8
Colonial Life NZ Fixed Interest		6.8	5.3	7.8	6.2
National Mutual Low Risk	21.1	6.6	4.9	6.6	7.0
AMP Capital Stable	47.6	6.3	5.5	6.7	6.5
Global Retirement Trust Stable	2.3	6.2	6.6	8.1	6.8
WestpacTrust Accumulation	64.7	5.7	5.5	5.6	5.3
Colonial Life International Bond	0.4	5.3	5.4	6.8	6.8
Tower Focus Fixed Income	3.2	5.3	5.0	7.0	5.8
AMP Capital Assured	32.7	5.1	5.1	5.0	4.6
Colonial Life Conservative	2.0	4.7	5.2	5.2	5.1
Royal Sun Alliance Deposit Fund	30.1	4.1	4.5	4.8	5.1
National Mutual Capital Protected	26.6	4.0	4.2	4.1	4.1
Tower Focus Cash	1.9	3.3	4.1	4.8	5.0
Tower Endurance	0.6	2.6	3.7	5.6	5.5
Jacques Martin NZ Cash Management	5.9	2.4	4.2	4.7
Tower ANZ Capital Stable	0.3
All Conservative Funds	278.0	5.5	5.3	5.8	5.7
Total Funds	1,809.4	8.0	7.1	8.5	7.9
Cash Benchmark (Net)		3.3	4.5	5.0	5.3
CPI		-0.4	0.7	0.8	1.1

Jonathan Eriksen is managing director of actuaries and business consultancy firm Eriksen & Associates.

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Eriksen Master Trust survey

The range of returns for all three categories of fund has widened in the past quarter. This shows how unpredictable markets can be and also reflects the effect of different investment styles.

Tuesday, July 27th 1999, 12:00AM

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