Published: 1 February 2005
Investors withdrew a net $220.8 million from managed funds in the December quarter, but FundSource Research Ltd (David van Schaardenburg) said strong performances grew aggregate net funds under management by $300 million.
That 1.9% gain took funds under management to $19.9 billion.
FundSource business manager Tim Anderson said investors withdrew $630 million through the whole of 2004, but funds under management still grew by $690 million.
Mr Anderson said the withdrawals were both disappointing & surprising: “Net outflows in the face of good performance come as a surprise to us as this pattern goes against our past experiences of investors’ behaviour.
“With improving forecasts in international equities & strong momentum in New Zealand equities, it also raises the question of whether these investors are making rational choices guided by a sound investment strategy, or instead relying on less rational decision criteria.”
Mr Anderson said the December quarter outflow was up 11% on the $200.1 million pulled out during the September quarter and the biggest withdrawal since the first quarter of 2003.
Only international fixed interest ($15.4 million) & New Zealand property ($2 million) attracted funds in the December quarter. $107.9 million was pulled out of diversified funds, $61.8 million from international equity (global & regional) funds. Diversified funds are the industry’s biggest category, with nearly $7 billion under management.
Website: FundSource full article