All equity, balanced and diversified income funds spilled red ink in February, according to the latest Aon NZ monthly investment update.
In a teaser for what lies ahead in March quarter results, the Aon figures show both local and global share funds all fell into negative territory as the tail end of February felt the first gust of coronavirus volatility.
“Returns from the domestic equity managers were negative over the month, ranging from -6.4% from… Harbour’s Australasian Equity Focus Fund to -2.8% for… Mint’s Trans-Tasman Equity fund,” the Aon report says.
The negativity hit every Australasian share fund in the Aon survey including absolute return products, which closely tracked the performance of the broader category in February. Overall, monthly performance among the small local absolute return community ranged from -2.4 per cent of the Salt Long/Short fund to -6.6 per cent for ANZ’s Equity Selection product.
Despite share markets entering February at record highs, the end-of-month slump seeped through into quarterly results with just seven Australasian equity funds posting positive returns over the three-month period. Nikko and Mint reported two funds apiece in this elite quarterly category while products from Milford, Devon and ANZ also landed in the black over the three months to the end of February.
Global equities (unhedged) fared little better over the month and quarter with the entire Aon international shares table down in February while just six of the 16 funds in the category booking positive returns for the three-month stretch.
“Returns from global share funds also performed negatively this month compared to the relatively strong returns seen on average in January,” the Aon report says.
“The median return over February was -3.7%, with returns ranging from -6.4% for… Mercer’s Small Companies fund to -1.2% from… Franklin Templeton Investment’s Global Growth fund.”
Listed property (both international and local) also sank in February as less-frequently valued direct real estate funds held up. Among other alternative asset class funds only Mercer stayed above water in February as its Unlisted Infrastructure and Liquid Alternatives funds returned 1 per cent and 0.5 per cent, respectively.
However, with the exception of the Legg Mason Brandywine Global fund, the entire NZ and international fixed income sectors were up for the month and quarter, the Aon report shows.
“Global bond funds performed positively this month, ranging from 0.1% (Western’s Global Aggregate Strategy) to 1.5% (Fisher’s Institutional Global fund),” Aon says. “… Nikko’s Global Fixed Interest fund delivered the highest return over the last 12 months with a return of 11.3%.”
Local bond fixed income managers were also up in February and over the quarter – albeit that the median manager three-month return of 1.5 per cent slightly underperformed the benchmark (1.6 per cent).
NZ fixed income was the best-performing asset class in February with international property (-8.2 per cent) coming off worst.
The ugly February numbers will undoubtedly look more attractive in light of the forthcoming figures for March – a month that bore the brunt of record volatility in both equities and fixed income markets.