Few win in dismal quarter
A NEW SURVEY BY Mercer Investment Consulting has shown that Indocam Asset Management's ORSO fund recorded the best returns during the fourth quarter of last year. However, results were generally dismal, in keeping with the rest of the year.
Indocam's fund grew 3.7 per cent, making it the only one out of the 19 fund managers surveyed to record a positive return for the last three months of last year.
The next-best fund return was from New Alliance Asset Management, which saw its fund hold firm with a 0.1 per cent return.
Of the other 17 managers, Deutsche Asset performed the worst, shedding 7.7 per cent. However, it remains in first place for returns over the past three and five years, recording 11.3 per cent and 10.8 per cent, respectively.
HSBC Asset Management, the largest asset-holder with HK$45 billion, had an average fourth quarter. HSBC ranked 10th with a return of minus 3.2 per cent. Its three-year performance is, however, better, ranking ninth with a total return of 8.1 per cent.
Jim Johnston, Mercer's director of investment consulting, believes the fourth-quarter results were reflective of last year as a whole.
'Global markets were sluggish. There is a lot of disappointment over year 2000 returns.'
Mr Johnston also expects that fund managers and funds will be critically reviewed by fund houses in view of the poor results.
Hong Kong equities, as represented by the Hang Seng Index, fell 3.5 per cent in the fourth quarter and 11 per cent for 2000. December saw a market rebound, with the index gaining 7.9 per cent in anticipation of interest-rate cuts in the United States.
Ongoing concerns over the US economy mean that there may not be any drastic improvement in fund performances this year.
'[Performances] will be determined by the US slowdown,' Mr Johnston said.
The US market, according to Morgan Stanley Capital International US, fell 8.7 per cent in the fourth quarter of last year. It shed 12.5 per cent over the whole year.
The median return of Hong Kong-centred funds, according to the Mercer survey, was minus 3.2 per cent for the fourth quarter of last year. For the whole year, the figure was minus 12 per cent. Over three years, the median return stands at 8.9 per cent per annum.
Individual funds that had the best results for the fourth quarter were Hong Kong dollar and US dollar money-market funds. AXA's US Dollar Liquidity Fund grew 1.6 per cent to take first place.
At the other end of the spectrum, balanced and growth funds fared the worst. Baring's Asia-Tilt Balanced Fund shed 7.5 per cent to record the biggest drop.
Over the whole year, the best returns came from AXA's US Dollar Liquidity Fund and HSBC's Global Money Fund, both growing by 6.1 per cent. The poorest showing was from Indocam's HK Global Balanced Fund, which had a return of minus 21 per cent.
For the the three-year period up to the end of last year, balanced and growth funds have had the better results. HSBC's Managed Growth Fund takes first place with a return of 11.3 per cent, closely followed by Fidelity's Advantage Growth Fund, which grew by 10.3 per cent.
None of the funds recorded negative returns over the three-year period. The worst showing was from JF's Provident Capital Fund, which grew by only 0.1 per cent.
Graphic: HK18gwz
