Goldman Henry delivers outstanding quarterly fund performance of 24.76%

News Release, 17 August 2009

While many funds struggle to get investors’ returns into positive territory, one fund manager has achieved a 24.76 per cent return to its investors in the six months to 31 July 2009 - and that’s after fees and expenses.

Goldman Henry analyst Alan Goldman credits the positive US sharemarket performance to investor anticipation of a turnaround. “Sharemarkets typically recover six to nine months ahead of any turnaround in economic growth. In the last six weeks, encouraging economic data has been published in the US including the housing market which appears to be ‘bottoming out’, the unemployment rate which is currently half of what is was six months ago, the financial system which has stabilized and consumer confidence which has picked up since January 2009.

“Statements from the US Federal Reserve are also consistently indicating a turnaround in GDP growth in the fourth quarter of 2009 and the sharemarket is reacting positively to this news.”

Mr Goldman expects the recovery to continue with the main driver of economic growth being the rebuilding of inventories. “The massive cost-cutting that has taken place over the past year has resulted in extremely low inventories which are now being replenished. Also productivity has increased as a direct result of the cost-cutting measures.”

Another factor that will give the rally legs is the vast amount of cash still sitting on the sidelines. “Some fund managers have missed the rally and are deploying portions of their cash into equities when the markets pull back. This behaviour adds momentum to the market.”

Mr Goldman says the market hit its low on 6 March 2009 when it hit a double bottom. This is when sharemarkets fall to the lowest point for the second time. On a chart, this forms a “W” shape. It was after this second low point that, on 9 March, US equities markets commenced a rally. The second bottom often forms within 3 – 4% of the previous low and the volume on the ensuing advance should increase significantly.

Two industries in particularly have thrived during that time. They are the materials and information technology sectors with Apple Inc increasing 91.44% and Freeport McMoran Gold & Copper increasing 146.73% in 2009 during the rally period.

ENDS

For further information please contact:

Alan Goldman Ph: (09) 304 0555
Senior Analyst Mob: (021) 242 4566
Goldman Henry Capital Management