AMP Henderson sees big fall in equities investments

AMP Henderson saw its managed funds fall during the September quarter, although it made gains in fixed interest, property and cash.

AMP Henderson, New Zealand's largest fund manager, suffered a hefty 15.9 per cent fall in its global equities investments, compared with the previous quarter, and a wider loss of 24.25 per cent for the year.

Quarterly losses in AMP Henderson's high, medium and low risk funds were 10.75 per cent, 5.44 per cent and 1.34 per cent respectively. Annually, losses were 14.23 per cent for the high risk fund, and 7.67 per cent for the medium risk, while the low risk fund made a gain of 0.6 per cent.

However, AMP Henderson chief investment officer Chris Wozniak said bonds continued to be favoured as New Zealand investors sought a safe haven from global equities.

Annual fixed interest returns were 9.6 per cent globally and 7.7 per cent locally, with September quarter returns of 3.7 per cent and 4 per cent respectively.

Property returned a steady 8 per cent for the year.

"However, it's important to consider that global bond yields are now down to 40-year lows. New Zealand bonds continue to provide appeal, but we have some concerns about the returns being sustained as we go forward," Mr Wozniak said.

The continuing decline in global equities was driven by a lack of investor confidence as well as softer earnings.

Investor confidence, in particular, took a number of hits over the quarter including continuing negative corporate news, a lack of clear evidence of a strengthening global economy and the possibility of a US/Iraq war, he said.

"September equity returns were the worst we've seen for some time, although New Zealand fared quite well compared to global markets, with the NZSE-40 index falling only 2.5 per cent compared with a global MSCI fall of 15.5 per cent for the quarter.

"Global markets are now reasonably priced but emotionally driven investors are still staying away."

AMP Henderson has secured $335 million in new wholesale investment in New Zealand so far this year.

AMP operates in 24 markets around the world, concentrating on the Australian, New Zealand and British markets.

AMP's parent company has been in turmoil recently, and announced plans yesterday to divorce itself from businesses delivering inadequate returns, and focus on core wealth management operations in Australia, New Zealand and the UK.

AMP shares were up 47c at $14.20 in mid-afternoon trade.

- NZPA