Funds shift holdings into Asia equities
Emboldened by rallies in Asian share markets, Hong Kong retirement funds reduced their cash holdings and shifted funds into regional equities during the first quarter of the year, according to Watson Wyatt's quarterly performance survey.
The survey, covering 301 funds with assets of $65 billion at 25 managers, showed the funds achieved a median return of 2.1 per cent over the quarter, 15.6 per cent for the six months to March and 3 per cent for the year to March.
For the three years to March the median return was 4.3 per cent while over a five-year period the median was 6.3 per cent.
As markets continued their final-quarter rallies into the new year, the survey showed the average proportion of assets invested in equities rose from 62 per cent at the end of last year to 71 per cent at the end of March.
Within that figure, the weighting of Hong Kong equities increased from 17 per cent to 20 per cent and the combined allocation to Japan and Asia also jumped 3 per cent.
At the same time, assets held in cash halved to 6 per cent of all assets, while the allocation given to bonds dropped from 26 per cent to 23 per cent.
Taken together, these changes reflect a particular shift in assets back to Asia, as well as a rise in the market value of the funds' assets.
The highest return by a fund during the first quarter was the 5.7 per cent recorded by a Morgan Grenfell fund, while the lowest return was minus 0.4 per cent.
Hong Kong accounted for 26 per cent of fund assets, the US 31 per cent, Europe 21 per cent, other Far East markets 8 per cent and Japan 5 per cent.
The best-performing fund over the five years to March was Morgan Grenfell's, with a return of 12.4 per cent, while over three years the top return was achieved by Scudder, Stevens & Clark Asia's single fund at 12.3 per cent and over a year it was Morgan Grenfell, with an 8.7 per cent return.
Of the three managers with the most funds, HSBC Asset Management (24 funds) recorded a ranking of 7th over five years with a return of 7.5 per cent; Schroder Investment Management (HK) (46) ranked 12th with a return of 6.1 per cent and Jardine Fleming (12) was ranked 15th with a 5.1 per cent return.
