Value beats growth in March
Wednesday, May 1st 2002, 6:47AM
Managed funds generally didn't produce spectacular returns in the March quarter after posting a strong finish in the last quarter of 2001.
"The March quarter was a lacklustre one for investments," Mercer executive director Louis Boulanger says. "All sectors posted small positive returns for the quarter, apart from unhedged overseas shares and foreign currency. The return of the median (wholesale) manager for the March quarter was –0.8% before tax and fees."
"The strength, or lack thereof, of the US economy continues to play a leading role in the fortunes of financial markets," Boulanger says. "The majority of overseas stockmarkets were up over the quarter. The Dow Jones rose by 3.8% but the technology-heavy Nasdaq composite index fell 5.4% and the European market was up 1.8%.
"Value as an investment style outperformed growth over the three-month period, with the MSCI World Value Index producing a return of –4.0% versus a return of –6.2% for the MSCI World Growth Index."
"Holding the lowest allocation to overseas shares helped Tower Asset Management achieve the highest return for the quarter of 1.3% before tax and fees," Boulanger says. "Other factors that helped Tower achieve this return was its high allocation to property and higher than market average cash position."
Returns for the past twelve months have ranged between a gross 8.6% return for Colonial First State Investment Management to a –1.7% return from WestpacTrust Investment Management. The median return for the 12 months was 1.9% before tax and fees.
Negative returns were posted by ING New Zealand, Guardian Trust Funds Management and WestpacTrust over that period.
Mercer's survey of discretionary balanced funds shows the average exposure to growth assets at March 31 was 60.5%. Tower had the lowest exposure to overseas shares, at 32.1% , while the highest exposure to domestic (or trans-Tasman) shares was shared equally between ING and BT Funds Management, with 20.4% each.
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