ONE of the country's biggest listed investment companies, Djerriwarrh Investments, says it could be some time before there is a meaningful recovery in the stockmarket because investors are "extremely risk averse".
The blue-chip investment house, which has a bit more than $686 billion in funds under management, said concerns about the political divisions in Canberra, the European debt crises and the outlook for Chinese growth were all weighing on investor confidence.
Yesterday's comments by the managing director, Ross Barker, were made as Djerriwarrh posted a 22.4 per cent fall in its full-year profit, buffeted by choppy market conditions.
A lower trading income and less capital returns from companies in which it invests caused Djerriwarrh's annual net profit after tax to fall to $44.1 million, from $56.9 million in the previous corresponding period. Revenue for the 12 months to June 30 was $42.4 million, compared with $53.6 million in the previous corresponding period, a fall of 21 per cent.
Djerriwarrh usually invests in stocks across the S&P/ASX200 but the bulk of the holdings are tied up in the top 50 stocks. The fund lost the equivalent of 4.4 per cent over the year, outperforming a 6.7 per cent drop in the S&P/ASX200.
Even with some blue-chip stocks now producing strong dividend yields, Mr Barker said few investors were willing to take advantage of downbeat prices and the market was likely to remain subdued in the medium term. Djerriwarrh shares closed 4? higher at $3.99.