Kiwi investors show a slightly greater appetite for higher-risk funds

Tuesday 2nd February 2010

Kiwi investors are exhibiting a greater appetite for managed, higher-risk funds according to FundSource’s report on 2009’s final quarter investments.

KiwiSaver again took the majority of investors’ monies, net in-flows amounting to $424 million for the quarter. Unit trusts regained some lustre as well, with just over $100 million being invested. Unit trusts include portfolio investment entities that offer a diverse range of investment options.

Group investment funds had the largest decline in flows, with a $184 million decrease for the quarter, the seventh quarter in a row where GIF’s have experienced new fund outflows. Since June 2008, $1.1 billion has flowed out of GIF’s.

“We would expect large flows into the diversified sector, as the majority of KiwiSaver money flows to diversified funds,” said FundSource business manager TJ Singh. “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 others also experiencing inflows over the quarter.”

Singh said the quarter’s investment patterns indicate greater confidence by investors, especially compared to money simply being pulled out of funds, or invested into a purely cash fund.

The mortgage sector continues to bleed, with net funds down $232 million for the quarter. Over $1.8 billion has been withdrawn from the NZ mortgage sector since June 2007.FundSource notes that the total net funds under management grew 6.3%, or $1.15 billion over the December quarter to now stand at $19.5 billion.

Businesswire.co.nz

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