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Funds under management slumped 8 per cent in the March quarter, reflecting both a sharp fall in market values and a flight to safety as investors withdrew from managed funds and put their money in the bank.
Reserve Bank figures show total funds under management fell NZ$5.281 billion in the March quarter to NZ$61.056 billion, while total unit trust and group investment funds fell 10 per cent to NZ$15.734 billion. Funds in superannuation funds, which includes KiwiSaver, fell 9 per cent to NZ$11.15 billion.
Figures from funds industry performance analyst Fundsource showed there were net fund outflows of NZ$48.6 million for the quarter, down from the December quarter net outflow of NZ$410.5 million. However, without the significant 'automatic' inflows from KiwiSaver of NZ$353 million, the picture would have been uglier.
Fundsource said its measure of retail funds showed they fell 5.5 per cent or NZ$1.078 billion to NZ$18.658 billion.
Cash funds showed a net inflow of NZ$216.9 million, Fundsource says, while Australian Equity, NZ Property and NZ Mortgage funds saw a net combined outflow of NZ$157.3 million for the March quarter. Unit trust and superannuation funds saw combined net outflows of NZ$396.3 million.
Reserve Bank figures show that the amount saved in bank term deposits rose NZ$2.761 billion in the first four months of 2008, while ANZ National, ASB and BNZ raised a further NZ$2.028 billion in bond and hybrid equity issues with 8 per cent plus interest rates over March, April and May.
This means funds under management have fallen NZ$5.281 billion over the first quarter, while funds in bank accounts and bonds have risen NZ$4.789 billion in the first four months of the year.
About 40 per cent of the fall in funds under management came from withdrawals and 60 per cent came from falling values on markets.
- INTEREST.CO.NZ
