Savings Product Review: Milford Equities Research Fund

Monday 24th April 2006

What is it called and what sort of savings product is it?
The Milford Equities Research Fund is a new managed fund which invests in listed New Zealand shares.

Who is the company behind it?
It is run by Milford Asset Management a boutique fund manager run by a group of well-regarded investment managers.

Who is the target market?
Any investor who wants exposure to a concentrated portfolio of shares and can withstand a bit of volatility in their unit price.

What return does it offer?
The fund aims to beat the gross performance of the NZSX50 portfolio index by 3% a year over a three-year rolling time period.

When was it launched?
February 2006

What other products is it like or is it competing with?
This fund is up against all the other New Zealand share funds and there are likely to be more of these coming to market, following this week's announcement on changes to investment tax.

Is it long term, short term or medium term?
Milford says people thinking of using the fund should have an investment timeframe of around five years.

What is the unique selling point?
The two main selling points are the people involved, particularly Brian Gaynor who is a high-profile analyst and columnist for the NZ Herald. Also Milford believe it has the ability to pick stocks which are "mis-priced and under-researched". Added to that it intends to have quite a concentrated portfolio ie: a small number of stocks as opposed to holdings in lots of different companies.

How strong a stomach do you need for it?
Reasonably strong. The fund doesn't follow an index and its performance is likely to vary significantly to the market (both up and down).

What's the hitch?
The main hitch, as with all funds of this nature, are that the market goes up and down and it's the skill of the manager which will be tested.

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