Room for growth

Press, 9 March 1987, Page 15

Room for growth

Unit trusts and other investment funds are underdeveloped compared with those overseas, Fidelity executives say. In Britain the ratio of equity trusts to shares is 10 per cent, in the United States and Japan 7 per cent, and in Australia 2 per cent. New Zealand’s ratio is “somewhat less” than in Australia. The growth is likely to be helped if shareholders spread their portfolios to overseas holdings. Mr Richard Timberlake, managing director of the Fidelity International Business division, told a briefing in Wellington that most investors should now have 25 per cent of their portfolios overseas. In Australia the move to spread investment overseas was low, with as little as 6 per cent of investors’ shareholdings held overseas. New Zea-

land’s ratio would probably be similar. Fidelity is the world’s largest privately owned investment group. The ownership is in the hands of the American Johnson family. It was founded in Boston in 1946 by Mr Edward Johnson. The headquarters are still in Boston, but the headquarters for international operation is Bermuda. Fidelity diversified into money-market and international investment in the 19705. Fidelity International, Ltd, heads international investment.

The scores of Fidelity funds . have considerable autonomy, but share investment research, and invest in each other. Investment decisions are based on fundamentals, but with charting information from the group’s own computer models providing help with “when to

move. In their American and international j dealings, Fidelity trusts do not hedge against currency movements or;use futures contracts for other hedging.

In the United States, many Fidelity trusts are given hourly ratings, and investors can switch funds from one to another.

If Government approval is granted, Fidelity could have New Zealand offices' within a year. At present,) New Zealand investors can make investments in Australian dollars with the Sydney office (sAust2ooo minimum investment) or can invest with offices in other countries.

Shares in Fidelity’s Taiwan Fund are obtainable only by buying shares on the American market.