Balanced funds recover

Balanced managed funds continued their recovery, delivering a positive return for the third consecutive quarter and regaining much of the losses experienced in 2008, a survey shows.

Mercer's survey of New Zealand wholesale balanced funds for the December quarter shows the median manager returned 14.7 per cent for the year ended December 31, compared to minus 14.4 per cent in 2008. The median two-year return was -0.5 per cent.

While funds recorded positive returns in the final quarter, the median return of 2.8 per cent fell short of the 7.6 per cent median return in the September quarter.

Martin Lewington, Mercer's business leader in New Zealand, said the outlook remained cautiously optimistic for investors.

"2009 was a strong year for balanced funds, many of whom were able to recoup almost all of the losses experienced in 2008 by the end of this past year. However, funds haven't quite broken even yet, which is reflected in the slightly negative two year return."

He said the last quarter was not as strong as the two previous quarters, reflecting market jitters.

- NZPA