Millions flow into managed funds

Net funds of $253 million flowed into retail managed funds in the December quarter, with KiwiSaver funds and unit trusts making the main gains while group investment funds continued to be out of favour.

Figures from FundSource today put the net flow into KiwiSaver funds at $424m for the quarter, while unit trusts gained $104m.

FundSource business manager TJ Singh said it was encouraging to see funds flowing back into non-KiwiSaver funds.

Unit trusts including portfolio investment entities offered a diverse range of investment options and investors showed greater confidence in those investment vehicles in the latest quarter, Mr Singh said.

Group investment funds (GIF) had the largest decline in flows, with a $184m decrease for the quarter.

The December quarter was the seventh in a row where GIFs have experienced a net funds outflow. Since June 2008, $1.1 billion has flowed out of GIFs, Mr Singh said.

In terms of sectors, the NZ diversified sector continued to have significant net fund inflows of $375m for the December quarter.

"We would expect large flows into the diversified sector as the majority of KiwiSaver money flows to diversified funds," Mr Singh said.

"However, funds have started to flow into single asset class funds as well, with the Australasian equity, NZ cash, global international equity, NZ fixed interest and other also experiencing inflows over the quarter."

The mortgage sector continued to haemorrhage, with net funds flow down $232m for the quarter. Since June 2007, $1.8b had flown out of the NZ mortgage sector.

Total net funds under management grew 6.3 per cent, or $1.15b over the December quarter to $19.5b.

- NZPA