A recent survey by consulting actuary firm Melville Jessup Weaver declared that in the last year managers, especially in the New Zealand and international share sectors are adding significant value.
Morningstar managing director Graham Rich says that managed funds are becoming more important to New Zealanders as an investment option.
By Morningstar's calculations the total amount of money invested in all managed funds (wholesale as well as retail) is about the same as the New Zealand sharemarket's capitalisation.
The growing awareness and popularity of managed funds is underscored by two recent surveys.
The WestpacTrust household savings indicators released this week show that although household wealth continues to stagnate due primarily to a decline in the sharemarket, managed funds are coming more popular.
"It was notable that for the sixth consecutive quarter, the annual growth in managed funds has exceeded that of short-term deposits at financial institutions," WestpacTrust Financial Services general manager Girol Karacaoglu says.
"Over the year, managed fund assets have continued to show the most significant growth, rising in value by $2.1 billion or 5.6 per cent. By comparison, the amount of deposits and cash held at financial institutions has risen by only $0.2 billion (0.4 per cent) over the year."
Likewise, the ASB Bank's investor confidence index says that managed funds are vying with residential property as the vehicle most likely to deliver them the best returns.
While investors are warming to the benefits of managed funds, sorting out the winners from the losers amongst the 500-odd funds available is still a difficult job.
Research house Morningstar gives its pick next week when it announces its annual Fund Manager of the Year Awards.
The awards are based on Morningstar's star rating system which ranks funds on a combination of their past performance, plus an analysis of each manager's attributes (things like corporate strength and product design).
Not all funds or managers are judged in the awards.
Only funds with a four or five star rating are eligible as finalists, so that excludes all the managers which either are not-yet-rated, or decline to be rated.
New Zealand and Australian index funds such as TeNZ and Tortis Ozzy, are not eligible, nor are specialist international equity funds, such as those which invest in specific countries or sectors. The only eligible international funds are those with a broad, diversified mandate.
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1999 MORNINGSTAR FUND MANAGER OF THE YEAR |
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Sector |
Finalists |
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Multisector |
Armstrong Jones |
Colonial First State |
Tower |
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Fixed Interest |
ANZ |
BNZ |
WestpacTrust |
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Mortgages |
ANZ |
Equitable Life |
Guardian Trust |
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|
Property |
Armstrong Jones |
Guardian Trust |
Tower |
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|
NZ/Australian Equities |
Armstrong Jones |
The National Bank |
Tower |
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International Fixed Interest |
BNZ |
BT Funds Management |
Colonial First State |
WestpacTrust |
|
International Equities |
AMP |
Armstrong Jones |
WestpacTrust |
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