Consulting actuaries Melville Jessup Weaver report on what happened in the past quarter and how the fund managers fared.
Friday, January 25th 2002, 12:18PM
Investment
Survey – December 2001
Consulting actuaries Melville
Jessup Weaver report on what happened in the past quarter and
how the fund managers fared.
December quarter features
The CPI rose 0.6%, up 1.8% for
the year,
the local share market was up
12.2%, 13.4% for the year,
while overseas shares rose 6.2%,
over the year they lost 11.3%, and
the NZ$ rose 4.7% in TWI terms,
-0.5% for the year.
The average fund return was 6.5%
for the quarter, compared to 1.6% for the year.
Do Managers add value?
The results show that managers
add value consistently in the local market asset sectors and
with their tactical asset allocation decisions. They lose value
when investing in overseas markets raising the question of whether
investments in this sector should be made on an index basis particularly
given the tax favoured position.
Results for the balanced funds
reviewed show that overall the managers have added value in the
last 12 months, but lost value over the 5 year period, reflecting
the dominance over this period of the returns achieved by a manager
in the overseas shares sector.
How did 2001 compare to the
managers’ performance over the last 5 years?
In our review below we look
to answer the question of how each manager's performance in 2001
compares to the past 5 years results.
Alliance Capital - 2001 was a good year and must vindicate
the decision of AXA to form an alliance with ACM. The numbers
for local shares, bonds and cash were good for the last 12 months.
Arcus Investment Management
- Strong results for
the last year for local shares, bonds and property and for the
total fund. Overall, performance was marginally down compared
to the previous 4 years.
Armstrong Jones - 2001 was not a good year and has seen
their relative 5 year position deteriorate against other managers.
The recent good performance of their overseas share manager must
have come as a relief, albeit the exposure to this manager is
being diluted.
AMP Henderson Global Investors
- Overall 2001 was a
reasonable year with little change to their 5 year relative position.
While their local share results improved, the results for their
balanced fund were disappointing because of its high exposure
to passive overseas shares.
ANZ Asset Management - The last 12 months saw a small overall
fall in their relative 5 year position. Their local share results
continued to be disappointing, but their passive asset allocation
stance continued to add value.
BNZ Investment Management
–2001 was
a good year for the fund monitored, which is now the second best
performing fund over the 5 year period. But overall, when their
results are compared to benchmark, they have lost value over
the period, highlighting the critical importance of the benchmark
in driving the actual performance results.
BT Funds Management – 2001 was an average year with
little change in their 5 year value-added rankings. The need
to improve their overseas share results remains outstanding.
Colonial First State –It is 6 months since the
investment team moved to Sydney and the results have held up
since then. With good results for both share sectors and for
tactical asset allocation decisions, they achieved a number 2
ranking for value added for their total fund. A good year.
Global Retriement Trust –Recent results have improved
and the decision to include an active NZ manager has been vindicated
by the results achieved over the last 9 months. Their added value
results for the last 5 years have not improved
Guardian Trust Funds Management
–While their
overall absolute results continued to disappoint, they have good
results in all but one sector and only their local share numbers
are holding them back.
Tower Asset Management –With one exception all
the funds have their greatest asset allocation to overseas shares,
and the good year achieved by TAM illustrates just how important
the results achieved in this sector are. Their 5 year position
has improved significantly.
WestpacTrust Investment Management
–2001 was
another bad year and they must be considering their options on
the future management of their business. Their results can only
get better.
Table 1 - Actual Gross Returns
(before fees and tax)
Total Fund (after fees and tax)
Manager
3 mths (%)
1 yr (%)
3 yr (%)
5 yr (%)
ACM
6.7
(1)
2.0
(4)
4.0
(6)
5.0
(11)
AIM
5.5
(2)
0.5
(7)
4.2
(4)
6.7
(2)
AJ
4.3
(5)
-2.0
(11)
2.6
(10)
5.4
(10)
AMPH
3.9
(10)
-1.0
(10)
2.5
(11)
5.5
(9)
ANZAM
4.0
(9)
0.1
(8)
3.3
(8)
5.6
(8)
BNZIM
4.3
(6)
2.5
(3)
4.4
(3)
7.2
(1)
BTFM
4.2
(8)
1.0
(6)
4.9
(2)
5.8
(7)
CFS
4.7
(4)
3.7
(1)
5.3
(1)
5.9
(6)
GRT
4.8
(3)
1.1
(5)
3.7
(7)
6.2
(4)
GTFM
4.2
(7)
-0.4
(9)
3.2
(9)
6.1
(5)
TAM
3.6
(12)
2.9
(2)
4.1
(5)
6.2
(3)
WIM
3.6
(11)
-2.8
(12)
2.3
(12)
4.9
(12)
Average
4.5
0.6
3.7
5.9
Index
2.8
0.6
3.2
5.8
Notes:
1. The index return for the
total fund is the average of the benchmark returns of the managers.
2. ACM, AJ and GTFM provided
their net returns on a pre-fees basis. A net fee of 30 basis
points was assumed.
3. AIM, ANZAM, and GRT were
unable to supply net figures. Fees of 30 b.p and tax at 33% were
assumed.
4.ACM and ANZAM share
returns are 'active'. AMPH and BNZIM 'passive' returns are unhedged.
5. FUM (Funds Under Management)
is in $m and is in respect of the funds analysed and performance
results shown.
Table 2 - Value Added
Total Fund
Manager
3 mths (%)
1 yr (%)
3 yr (%)
5 yr (%)
ACM
4.7
(1)
1.8
(3)
1.1
(6)
0.1
(6)
AIM
3.1
(3)
1.2
(5)
2.3
(2)
1.6
(1)
AJ
2.5
(4)
-4.7
(11)
-0.7
(9)
0.4
(4)
AMPH
0.0
(11)
1.2
(6)
-0.8
(10)
-1.2
(9)
ANZAM
1.2
(7)
-0.3
(9)
1.2
(5)
1.3
(2)
BNZIM
0.3
(9)
1.3
(4)
0.3
(7)
-0.4
(7)
BTFM
1.2
(8)
0.0
(7)
3.4
(1)
0.9
(3)
CFS
2.1
(5)
3.1
(2)
1.9
(3)
-2.1
(11)
GRT
3.5
(2)
0.0
(8)
-0.1
(8)
-0.6
(8)
GTFM
n.a
n.a
n.a
n.a
TAM
1.4
(6)
3.6
(1)
1.3
(4)
0.1
(5)
WIM
0.1
(10)
-3.1
(10)
-1.0
(11)
-1.3
(10)
Average
1.8
0.4
0.8
-0.1
Asset Allocation
Manager
3 mths (%)
1 yr (%)
3 yr (%)
5 yr (%)
ACM
0.3
(3)
0.2
(7)
0.1
(6)
0.2
(4)
AIM
n.a
n.a
n.a
n.a
AJ
0.5
(1)
0.7
(3)
0.5
(3)
0.7
(1)
AMPH
0.1
(6)
0.4
(5)
0.1
(7)
-0.2
(6)
ANZAM
0.0
(8)
0.8
(2)
0.4
(4)
0.5
(3)
BNZIM
0.1
(5)
0.5
(4)
0.5
(2)
0.6
(2)
BTFM
0.4
(2)
-0.6
(9)
0.8
(1)
0.0
(5)
CFS
0.0
(7)
1.5
(1)
0.3
(5)
-1.7
(9)
GRT
n.a
n.a
n.a
n.a
GTFM
n.a
n.a
n.a
n.a
TAM
-0.1
(9)
0.0
(8)
-0.4
(9)
-0.3
(7)
WIM
0.3
(4)
0.4
(6)
-0.2
(8)
-0.6
(8)
Average
0.2
0.4
0.2
-0.1
Notes: 1. No Total Fund figures
are shown for GTFM as no benchmark asset allocations are available.
2. The asset allocation figures
are the difference between the value added in total and that
added for stock selection.
Table 3 - Actual Asset Allocation
as at 31 December 2001
