Savings Product Review: WINZ (EFT)

Monday 24th April 2006

What is it called and what sort of a savings product is it?
WINZ is what�s known as an ETF or exchange traded fund. It is an NZX-listed investment fund which invests in 860 companies listed on sharemarkets all around the world.

Who is the company behind it?
WINZ is a product of AMP Capital, one of the biggest fund managers in New Zealand.

Who is the target market?
In many ways listed index funds like this are a foundation for any portfolio of international shares. They suit people who want growth and are prepared to take sharemarket risks.

What return does it offer?
Unlike a fixed interest investment it is hard to pin a number on a sharemarket fund. The return will be whatever the market does, no more, no less. In the year to February 28 it has generated returns of 24.52%. The returns for the three-year period have been 13.98% and for the five years up to February 28 it has been a negative 4.87%.

When was it launched?
The WINZ fund has been on the market since June 30, 1997.

What other products are they like or do they compete with?
There are a number of other index, or passively managed funds like WINZ it competes against. Other international funds which are actively managed and have a generalist approach, rather than a specialist one, could also be considered competitors.

Is it long term, short term or medium term?
International shares are considered a medium to long-term investment, as history shows that while returns can go down at any point, the long-term trend is for capital appreciation.

What is the unique selling point?
WINZ has a tax edge over some competing funds that is a plus. Also its broad diversification (860 companies) and low management fees are enticing.

How strong a stomach do you need for it?
Mildly strong. In its early days WINZ had fantastic returns, however when the international markets crashed after the dot com bubble the picture wasn�t so rosy. In the past couple of years the numbers have been much more pleasant.

What�s the hitch?
That the government will remove the tax advantage.

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