Sharemarket bounce helps managed funds

Managed funds continued to make strong returns during June thanks to a strong run by local and overseas sharemarkets, but that is not expected to continue, investment research company Fundsource says.

According to its latest survey, Fundsource said both New Zealand and international equity markets had performed well over the month, "and this carried through to pleasing fund returns in those funds that focus on these sectors and diversified funds with exposures to equities markets".

Fundsource said the continued positive returns from the local and offshore sharemarkets over the month was "great news for those investors who have stayed invested during the volatile period we have seen this year rather than withdrawing to invest in income assets".

Fundsource research manager Binu Paul said the New Zealand sharemarket "continued to surprise in June with further upward momentum largely supported by merger and restructuring activity".

"But while investors should not be too concerned about a hard landing, they should be aware that such high returns from domestic equities are not likely to be maintained as a slowdown in domestic activity is widely anticipated."

Fundsource also said the further decline of the New Zealand dollar over the period had also boosted the returns of many funds relative to their exposure to foreign currencies.

Fundsource said it found the strongest performance in New Zealand and Australian equities.

Active New Zealand equity funds returned an average of 4.82 per cent during June alone taking their performance during the year to June to an average of 13.15 per cent.

Australian equity funds returned 5.14 per cent for the month, while International Equity funds returned 2.59 per cent.

- NZPA