Poor results overseas hit NZ funds

The amount of money entering all New Zealand retail managed funds fell by 34 per cent to a net $217.7 million for the March quarter, says investment fund research company IPAC Securities.

IPAC Securities NZ director David van Schaardenburg said negative international sharemarket performances during the December and March quarters were behind the dropoff in net funds flow into New Zealand-based retail managed funds.

Poor overseas markets also limited growth in New Zealand's industry size, his report said.

Net funds under management grew by 1 per cent to $18.101 billion for the quarter, and were up by 6 per cent for the March year.

International equity inflows to New Zealand shrank to $46.44 million for the quarter, from $147.53 million for the previous quarter. Net outflows occurred from diversified funds, property and New Zealand fixed interest funds.

"Turning the other way, the New Zealand cash sector had net inflows of nearly $47 million, the sector's first positive inflow since December 1998," said Mr van Schaardenburg.

IPAC ranked Macquarie Bank top fund manager by fund flow for the quarter, attracting $57.11 million, while Tower Group and AMP were the top fund managers by total funds under management. Of the 35 fund managers surveyed, almost half recorded negative net funds flow.

The mortgage fund sector continued to grow, while unit trusts surpassed superannuation funds for the first time since March 1990 when IPAC began its survey.

"IPAC believes unit trusts will continue to be favoured over superannuation funds due to more diversity of investment choice and greater flexibility and transparency for investors," said Mr van Schaardenburg.

- NZPA