KEY POINTS:
Investment funds returned 5.7 per cent for the year ended December, but minus 1.7 per cent for the fourth quarter amid market volatility, according to a Mercer survey of fund managers.
Tower Asset Management topped quarterly returns with -0.4 per cent before fees and tax, while Arcus Investment Management was at the bottom with a -2.8 per cent return.
"The loss of confidence in financial assets of lower credit quality, sparked by troubles in the US sub-prime mortgage sector, continued to affect other asset classes, and these effects were compounded by uncertainty over whether (or to what extent) the US economy would move into a recession," Mercer principal John Gallacher said.
The domestic sharemarket fell 5.1 per cent for the quarter, and world sharemarkets also fell by varying degrees.
Fund managers with a lower than average allocation of New Zealand equities performed better in the quarter, he said.
New Zealand's short term interest rates and currency remained high, with the kiwi up 1.5 per cent in trade weighted terms.
Balanced fund returns ranged between -1 and -2 per cent, due to the falling market values of shares and property.
Growth as an investment style performed better than "value" over the three-month period, although still gave negative returns, Mr Gallacher said.
Over the year, AMP Capital Investors Superannuation Fund had the highest return of 6.9 per cent, while BT Funds Management was at the bottom with a 1 per cent return.
- NZPA
