Pain prolonged

FUND managers with exposure to international equity markets lost more ground in February, with Australian and international share markets producing negative returns of 1.2 per cent and 1 per cent respectively.

A performance survey by InTech showed February was a poor month for growth funds, with the median fund in the InTech Growth Funds Universe posting a negative return of 0.8 per cent. Just two of 35 managers surveyed produced positive returns.

Unlisted property was the strongest performer during the month, growing 0.7 per cent, followed by Australian Bonds at 0.6 per cent, international unhedged bonds at 0.5 per cent and listed property at 0.4 per cent.

The international equity market, particularly in the United States, continued to suffer from negative sentiment following the Enron collapse. The US share market fell 2 per cent during the month while the Pacific region, excluding Japan, dropped 2.5 per cent. Japan strengthened by 2.24 per cent, although it is still 27 per cent lower than a year ago.

In the local market, resource stocks out-performed industrial stocks. During February, the S&P/ASX 200 resources returned 3.7 per cent compared with negative 2 per cent for industrial stocks. Resources outperformed industrials by 14 per cent.

The worst performing funds, InTech found, were those that maintained growth style orientations for Australian shares. ANZ’s funds declined 1.7 per cent, Credit Suisse 1.4 per cent and HSBC 1.4 per cent.

Top positions for the year were maintained by value-orientated managers, with Maple-Brown returning 7.4 per cent, followed by Tyndall 4.5 per cent and Perennial 3.8 per cent.

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