Bank of New Zealand has rationalised its funds and now claims to have the highest average fund size of any manager in New Zealand.
Rodger Murphy says the average size of its funds is $96 million.
"This is the largest average retail fund size in New Zealand and compares with an average of $34 million at September 30, 1996."
The group has reduced its number of funds from 19 to 13 (although it's about to launch a passive international equity trust) and it has cleaned out its unitholder base.
Part of that move has included making sure there were no unitholders with balances of less than $500.
Murphy says simplifying funds is the biggest step to encouraging greater investment.
"There is a lot of discussion about the role the Government can play to encourage saving, but we shouldn't overlook the role financial institutions have in creating a more investor-friendly environment," Murphy says.
Compared to over developed countries New Zealand has a high number of funds per head of population, and its average fund size is relatively small, thus having a negative impact of the industry's profitability.
Murphy says investors are attracted to simplified funds, and most of the 84,000 new customers BNZ has picked up over the past three years have gone into multi-sector funds.
A negative factor is that the average age of investors in the multi-sector funds has risen.
"In particular the average age of investors in the Dynamic Growth fund rose from 34 to 36 and in the Balanced Growth fund from 41 t 43."
Murphy says it's too early to see if there is a trend here, however it is important to watch for any signals that younger people are not investing
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