Funds don't reflect markets

Managed fund performance figures for the three months to March 31 aren't reflecting either the growing New Zealand economy or the perceived recovery in international economies.

It says that the average return for funds that invest in New Zealand shares was a 0.02% loss, compared to an index return (NZSE40 taxed at 33%) of plus 1.68%.

During this quarter only one managed fund, the Westpac New Zealand Share Index Plus Trust, beat the index.

However a majority of funds added value, FundSource says.

"Despite poorer market returns during the later part of the quarter, managed funds improved their performance with a 0.18% gain in March."

The performance of international share funds over the quarter have been somewhat neutral with the sector average (-3.79%) only half a percentage point out from the Morgan Stanley World Index (-3.11%).

The top performer was the Sovereign CFS Global Property Shares Trust with a 5.32% return.

Again however there are positive indicators for managed funds within the last month of the period. The sector average outperformed the market index, with New Zealand Funds Global Small Companies leading the way with a monthly return of 3.25%.

One of the most positive sectors was New Zealand property funds where 11 of the 13 unit trusts added value during the quarter.

FundSource says this probably reflects the bubble nature of the current housing boom. No property funds recorded outstanding returns.

"The best indication of this is perhaps the index, NZSE Property index, which recorded only a 0.85% return for the quarter.

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