By PAULA OLIVER
The country's largest fund manager predicts that the "exceptional" returns enjoyed during the past year are about to fall back to more normal levels.
AMP Capital Investors yesterday revealed healthy returns on its funds for the June quarter, helped by a buoyant local equity market.
Its strategic NZ equities fund
had a gross return of 5.6 per cent, taking its annual return to 25.9 per cent.
Chief investment officer Tore Hayward said the local markets had been helped during the quarter by rising global equity markets and a stronger-than-expected domestic economy.
AMP Capital's local equity funds had also benefited from Rubicon's takeover of Tenon.
Investors who were willing to take on risk had been well-rewarded.
AMP Capital's high-risk diversified fund had a gross return of 3.3 per cent, compared with 2.4 per cent for its medium-risk and 1.1 per cent for the low-risk fund.
Viewed on an annual basis, the reward for taking on risk was even more stark - the high-risk fund had a gross return of 21.3 per cent, compared with 13.5 per cent for medium-risk and 8.7 per cent for low-risk.
Hayward said returns would return to normal - about 8 or 9 per cent, before fees and tax.
He also delivered what would be an unwelcome prediction for exporters - conditions were right for the kiwi dollar to rise in the coming months.
Longer-term, it would eventually fall back again.
