The fund manager AMP Capital Investors will continue to favour overseas equity markets as it anticipates the end of recession.
AMP investment strategy head Jason Wong says low interest rates, rising business and consumer confidence, and better global conditions indicate a global recovery is underway.
But Mr Wong says it remains unclear what sort of recovery it will be, though growth is likely to be below previous levels.
The return in real terms for AMP's flagship balanced fund rose nearly 5% in the three months to June, and nearly 1% for the year so far.
On an annual basis: returns fell nearly 5% after a decline of 14% in the previous year.
Mr Wong says stocks are likely to continue to provide better returns than bonds or cash, though he says global equity markets look more attractive than the local market for the next six to twelve months.
He says the New Zealand dollar is probably around fair value at present, but offshore investors are more optimistic than locals because of the economic outlook lifting commodity prices.
AMP Capital Investors manages $10.8 billion of assets and has continued to have a net inflow of funds despite the downturn and financial market turmoil.