Fisher Funds tops Morningstar survey

Research company Morningstar has given its top ranking to fund manager Fisher Funds, which ignores index weightings and concentrates on small to mid-sized listed stocks.

Morningstar assessed the performance of AllianceBernstein/AXA, AMP, Fisher Funds, ING and Tyndall/Asteron, assigning a Highly Recommended to Fisher alone.

However, Fisher's "index-unaware" approach was more suitable in a supporting role to larger fund managers, Morningstar said, as its narrow focus could also lead to stock liquidity problems.

"The small- to mid-cap sector of the New Zealand sharemarket has performed very strongly over the past three years, the likes of Pumpkin Patch, Michael Hill International and Ryman Healthcare among the companies fuelling this," Morningstar said.

"These smaller shares have managed to outperform large-cap names such as Contact Energy, Sky TV and The Warehouse (until recent corporate activity at least)."

Telecom dominates the NZX50 Index, accounting for about 20 per cent by market capitalisation -- down from more than 30 per cent three years ago -- and has a large impact on New Zealand share fund returns.

The five managers assessed were either underweight, or in the case of AMP and Fisher, did not hold Telecom shares at all when they plunged earlier this year.

Morningstar rated AXA and ING as Recommended, and AMP and Tyndall as Investment Grade.

"The five houses we assessed ... all employ experienced professional investors with a thorough knowledge of the New Zealand sharemarket and investment environment."

- NZPA