Wellington, April 20 NZPA - Strong returns for most forms of investment, particularly shares, showed the global economic recovery was well under way, AMP Capital Investors said today.

However, the chance remained of a retreat in the short-term, given that share markets had reached highs not seen since the global economic crisis.

New Zealand equities posted a 2.7 percent return for the three months ended March 31, and 27.8 percent for the year ended March, AMP said.

Hedged global equities returned 3.9 percent for the quarter and 61 percent for the year, while unhedged global equities posted a 5 percent quarterly return and 24.9 percent for the year.

Global property returned 5.8 percent for the quarter and 101.1 percent for the year, but New Zealand direct property fell 12.6 percent for the quarter and were down 30.2 percent annually.

Equities were likely to continue making gains, although a short-term pause was on the cards, said AMP Capital Investors head of investment strategy Jason Wong.

"Shares might no longer seem cheap but they should continue to be supported by stronger economic conditions and very easy liquidity conditions," he said.

"It still feels like the cyclical rally in shares has more to go, but we are becoming more alert to potholes in the road ahead."

Other asset classes such as bonds and property also had some risk.

For the quarter, the New Zealand fixed interest fund posted a 2.5 percent return and was up 7 percent for the year, while global fixed interest returned a similar quarterly return and was up 5.1 percent for the year.

AMP Capital's conservative fund returned 1.9 percent for the quarter and 8.9 percent for the year; its balanced fund returned 1.9 percent for the quarter and 16.9 percent annually; and its growth fund returned 1.9 percent for the quarter and 24.3 percent annually.