Funds flow into boutiques picks up

by Paul McBeth

Investors are becoming more active in their portfolios, with boutique fund managers such as Milford Asset Management, Craigs Investment Partners and Fisher Funds boosting their cash flows through the first three months of the year.
New Zealand’s managed funds grew $313 million in the first three months of the year as strong support for KiwiSaver and unit trusts, including cash portfolio investment entities (PIEs), underpinned the sector’s performance. Net funds under management topped $20 billion in the March quarter KiwiSaver funds surged $525 million while unit trusts showed a net positive flow of $55 million, according to managed fund researcher FundSource. Group investment funds (GIFs) had the largest decline with a net outflow of $159 million for the quarter.
“It’s a big positive on the performance side contributing to funds under management, and we can see money flowing into boutique funds,” said TJ Singh, acting business manager at FundSource. “They’ve done quite well at receiving money, as they are more active and different from KiwiSaver.”
Singh said Pathfinder’s commodity fund reported an inflow of $2.5 million, and it was a positive to see investors looking to take a more active role in allocating their funds.
The return of Paul Glass after a year’s gardening leave was a big plus to the sector, and Singh said he was excited by Glass’ comments that he wants Devon Funds Management to have the country’s largest investment team. Singh was also watching the Andrew Bascand-led investment team at Harbour Asset Management closely as well.
The diversified sector had the biggest net inflow of $404 million in the March quarter, which was underpinned by the net inflow from KiwiSaver funds, with default schemes automatically putting the money into the diversified sector, Singh said. The mortgage sector declined $152 million over the period.
As the wider economy continues to recovery after its worst recession in 18 years, Singh expects funds management will pick up as the country’s capital markets resume normality, and people’s optimism about investing returns.
Paul is a staff writer for Good Returns based in Wellington.