Red ink was back in demand this February for Aon as negative returns in most asset classes added colour to the investment consultant’s monthly NZ update.
After years dressed mainly in black, the latest Aon NZ investment report features red across almost all of its short-term performance numbers.
According to the Aon report released last week, all asset classes bar NZ cash and fixed income fell during February. Over the three months to the end of February only the Australasian shares and NZ cash benchmarks recorded positive results.
However, with the exception of Australasian property, the median manager in the Aon survey outperformed their respective benchmarks across all asset classes for the three-month period before fees and tax.
“Balanced funds delivered negative returns in February as all sectors, with the exception of domestic cash and bonds, fell over the month,” the Aon report says. “Castle Point’s 5 Oceans Fund was the best performer over the month (-0.2%), while Nikko’s Balanced Fund has the best return over the last 12 months (14.7%).”
While about half of Australasian equity managers in the Aon survey experienced a down February all but one (Devon) reported positive three-month returns.
The Aon report says NZ shares index came out ahead in February following a huge spike in the price of a2 Milk, which rose 50 per cent over the month.
“Without the benefit of a2’s strong performance, the return of the NZ index for February would have been close to -4%, broadly in line with other major equity markets,” the survey says.
Global asset classes were overwhelmingly negative for both the month and quarter. All international equity and fixed income managers in the Aon survey were in the red for February.
Just three global share funds – Russell Emerging Markets (2.8 per cent), the T Rowe Price-managed Harbour Global Equity Growth (1 per cent), and Franklin Templeton Global Growth – eked out positive returns over the three months to February 28.
During the same quarterly period only Brandywine (1.8 per cent) and Milford (0.2 per cent) reported positive returns in the Aon international fixed income categories.
Commodities bucked the negative global trend for the three-month stretch with both the Pathfinder (7.5 per cent) and AMP Capital (3.8 per cent) reporting positive returns: both funds were down in February along with all others grouped under Aon’s ‘other’ global funds category.
The February effect also caught out absolute return funds tracked by Aon with all falling into the red over the month except the AMP Capital Multi-Asset product, which carded a par.
Despite the red-infused short-term figures, all asset classes (barring global property) and most funds in the Aon survey were wearing black for all periods over one-year and beyond.