By Liam Egan and Ross Kelly
THE Australian share market has enjoyed its best start to a calendar year since it rose 4.3 per cent in January 2001, boosting median managed fund returns in the process.
A Mercer InvestmentConsulting pooled fund survey put returns for the S&P/ASX 300 index in January at 3.6 per cent, largely driven by energy (up 10.1 per cent) and materials (up 9.4 per cent) stocks.
Large caps were the strongest index performers in January at 4.1 per cent, relative to mid stocks (up 0.3 per cent) and small cap stocks (up 3.8 per cent).
Other world equity markets also showed strong gains, according to the survey, with the US up 2.6 per cent, the UK up 2.9 per cent and Japan continuing to impress on its 40 per cent growth in 2005 with a 3.7 per cent rise this January.
The median fund in the Mercer survey of 34 balanced and growth funds delivered a return of 1.8 per cent for the month, 12 per cent for the financial year to January 31, and 16.5 per cent for the 12 months to January 31.
As for Japan, increasing domestic consumption, company profits and export demand from China and the US are expected to fuel an already burgeoning economy, according to direct investment provider Commsec.
To tap into such favourable economic conditions, the Commonwealth Bank-owned trading facility has launched a new Nikkei 225 index tracking managed fund.
The five-year fund, which charges a flat 2 per cent fee, requires a minimum investment of $10,000 and guarantees a return of 7 per cent in the first year and 2 per cent for the remaining four.
According to Commsec chief equities analyst Craig James, the Japanese economy grew at a rate of 2.4 per cent in 2005 and is expected to grow solidly at 2 per cent annually to 2008.
