An analysis by Navigator has found that investment sectors often talked about and promoted as ‘hot topics’ and ‘the next best thing’ are sometimes, in fact, not.
An analysis by Navigator has found that investment sectors often talked about and promoted as ‘hot topics’ and ‘the next best thing’ are sometimes, in fact, not.
Mr Paul Northey, general manager, group marketing and distribution development, said inflows via the $9 billion Navigator portfolio administration service to a much talked about investment option, ethical funds, wins extremely low support from retail investors when compared with other investment options.
"Ethical funds are often vaunted and promoted as a ‘hot’ investment option and the ‘next big thing’, but our analysis shows that in reality, it receives minimal attention by investors utilising our service," Mr Northey said.
"Between November 2001 to 30 June 2003, the ethical funds category achieved less than 0.1 per cent of gross Navigator inflows," he said.
The Navigator analysis found that investors currently much prefer ‘conservative’ investments. "Good support continued for defensive, income producing options such as Australian fixed interest and mortgages sectors," Mr Northey said. "Property, with its strong returns and slightly more defensive nature than equities, also continued to be well supported," he said.
"Inflows to equities held up relatively well. There was some fall in support for the ‘equity – growth’ sector, but inflows to the imputation category were sound as it contains the better performing value based funds such as Advance Imputation, Perpetual Industrial and Investors Mutual," Mr Northey said.
Another ‘hot’ investment option category, hedge funds, received more support than the ethical category, but is still comparatively low at approximately 0.7 per cent of gross Navigator inflows. "This could be explained by hedge funds being a more sophisticated financial tool. It’s still only a relatively small proportion of investors that are comfortable using hedge funds and even then the investment into hedge funds is likely to only represent a small portion of their overall portfolio," Mr Northey said.
| Gross Navigator Sector Inflows1 | |||
| Sector | 20012 | 20022 | Q1,2 20032 |
| Property | 8.2% | 11.3% | 14.0% |
| Australian Equity Growth | 21.0% | 18.8% | 13.4% |
| Australian Equity Imputation | 15.3% | 16.7% | 16.3% |
| International Equities Global | 15.6% | 19.4% | 16.4% |
| Australian Fixed Interest | 3.4% | 2.6% | 5.7% |
| Mortgage Trust | 4.4% | 7.7% | 11.9% |
| Diversified Income | 4.8% | 4.3% | 4.9% |
| Diversified Balanced | 6.4% | 4.8% | 2.8% |
| Diversified Growth | 17.9% | 10.4% | 10.0% |
| Ethical Funds | N/A3 | <0.1% | <0.1% |
| Hedge Funds | N/A3 | 0.8% | 0.7% |
1 Gross Navigator sector inflows includes Navigator Personal Investment Plan and Navigator Personal Retirement Plan.
2 Calendar year.
3 Not available – sectors became available from November 2001.
-ends-
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Notes to editors
- Aviva Australia is a group of two specialist financial services companies: Navigator Australia Limited and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
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