BNZ takes fund manager prize in gloomy year

They may not have won much in the way of returns lately, but some of the country's fund managers can at least console themselves with winning a prize.

The FundSource Fund Manager of the Year Award has gone to BNZ Investment Management for the second year in a row. The runner-up was Guardian Trust Funds Management.

The awards are judged by FundSource, a company that researches the managed funds business for clients such as fund managers and investment advisers.

FundSource says BNZ exhibited a "consistent, disciplined and conservative" approach and produced solid above-average returns.

Illustrating what a ghastly time it has been for managers and their customers, most of the 10 winners of the individual categories produced returns not much better than investors could have earned by putting their money in the bank, and in some cases much worse.

The BNZ international equity trust, for example, which took the award for best international share fund, lost 11.4 per cent in the year to the end of September.

The only comfort for investors was that it did better than international share prices - down 30 per cent over the same period, as measured in New Zealand dollars - and better than many of its peers.

Why should managers receive an award for coming in with such gloomy numbers?

FundSource executive chairman David van Schaardenburg says returns depend on the overall direction of investment markets, not just the manager's performance. The idea is to identify managers who have done relatively well.

"If the markets are really good, do you give an award to all the managers because they've all had good returns?" he asks. "No, we don't do that either."

Still, some funds did manage to score a double, winning a prize and a decent return for their investors. The Fisher Funds NZ growth fund, which invests in local shares, returned 10.85 per cent in the year to September, after tax and ongoing fees, while ING property securities fund investors earned 8.77 per cent.

Category winners were:

fusqi NZ cash funds: Axa NZ - Axa cash management fund.

NZ Mortgage funds: Guardian Trust - Guardian mortgage fund.

NZ property: ING NZ - ING property securities fund.

NZ shares: Fisher Funds Management - Fisher Funds NZ growth fund.

International shares: BNZ Investment Management - BNZ international equity trust.

NZ fixed-interest: National Bank - Thoroughbred corporate bond trust.

International fixed-interest: National Bank - Thoroughbred international bond trust.

Diversified defensive: Southland Building Society - SBS capital stable fund.

Diversified balanced: Axa NZ - Axa balanced growth trust.

Diversified Growth: NZ Funds Management - NZ Funds high-growth trust.

To qualify for the awards, funds must be New Zealand-based, open to the public, actively managed, require a minimum investment of $5000 or less, have at least $10 million in the fund, and have gone through no major ownership changes in the year covered by the awards.