AMP looks at local bonds
AMP Capital Investors is tilting its investments towards global equities and local bonds in expectation of a local slowdown in the coming year.
Wednesday, February 9th 2005, 6:22AM
by Rob Hosking
“We’re not retreating into defensive assets,” says chief investment officer Tore Hayward.
The slowdown will be relative to the rest of the world and the resulting downward shift in interest rates locally is going to make New Zealand bonds perform better than global bonds.
The company has made a 1% shift from local equities to global equities, and a 5% shift from global bonds to New Zealand bonds.
And it is keeping a close eye on its global property investments.
“We haven’t shifted anything out yet,” says Hayward. “We’re just looking to see whether we should start to trim a little bit to reduce our exposure in that market.”
Overall, the equity markets have had a “dream run” for two years, says Hayward. AMP’s December quarter was the strongest for the past 12 months.
Of the company’s diversified funds, even the low equity fund’s gross performance for the year was as high as 9.3% - well above the cash performance of 6.4%.
The medium equity fund produced a 11% gross return, with the high equity fund coming in at 16.5%.
Hedged global property was the star performer, with a 41.1% gross return for the year.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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