The great New Zealand savings rort

Even during buoyant periods, retail investors find their portfolios do not reflect the performance of market indexes or the funds they are in.

A number of analyses here and overseas support anecdotal evidence that retail portfolios systematically under-perform the markets in which they are invested.

The Consumers' Institute recently published a study of fund performances over the 10 years to February 2003. It showed that investors in well-known funds run by establishment names such as Tower, BNZ, ING and BT averaged real returns that were only 30 per cent of the real returns the funds actually earned.

Nor was there any evidence of these professional investors outperforming market averages.

A study done for these articles aimed to find out why New Zealanders experience systematic under-performance of market returns.

Read More - Opens in a new window