Our hands-on ‘active’ approach to investing has delivered results for our investors
To achieve your investment goals, you have many different providers to choose from, and each will have their own unique approach to investing your savings. The investment approach your provider takes is an important factor that’ll have an impact on the level of returns you can expect to receive, the fees you’ll pay and the ability to grow your savings over the long term.
We take an active approach to investing
ANZ Investments is an active manager, and we’re committed to our philosophy of active investment management. We want to be clear that our active investment management approach isn’t the same as what is sometimes portrayed in the media. In fact there are many different investment approaches that active managers from around the world have chosen to take.
At ANZ Investments, we are long term investors with a preference for holding quality investments, ones that are well diversified, and which are highly liquid (ensuring we can sell investments when we need to). We don’t speculate on buying or selling stocks just to make a quick buck.
Through our active management approach we believe we can deliver consistent, after fees, returns that are superior to a particular market index. We aim to do this by taking a long-term view, ensuring we don’t take undue risk, and making quality investments which we believe can perform well.
This has been the basis of our investment approach for over 25 years. We spend a significant amount of time and effort getting the basics right, which begins with choosing the best combination of asset classes (such as shares, property, cash and bonds) for each of our funds. We do this because we know this decision drives a significant portion of the overall return you can expect to receive from your investment. Then, through careful research and analysis, we and our managers combine the best quality investments for each of our funds.
Fees are important, but they’re not the only factor to consider
Because there is a higher level of decision-making and analytics involved in our active investment approach, the fees we charge aren’t the lowest in the industry – but members of our three KiwiSaver schemes should realise that they benefit from fees that sit below those charged by the majority of other KiwiSaver scheme providers1.
There are some providers that use a passive investment management approach for certain aspects of the management of their funds. Passive management aims to deliver returns that closely follow the performance of a market index for each asset class. However, passive managers generally look to replicate the performance of the market by buying all of the securities – good, bad or otherwise – that make up the market index.
Because their approach requires less analytics and decision-making, providers who mainly employ passive investment management tend to be at the lower end of the fee range. Active managers generally utilise a higher level of decision-making and analytics, and therefore the fees charged will typically be higher than those of a passive manager.
While fees play an important part in your savings, they shouldn't be the only consideration. More important is to think about the long term performance of your fund after fees, as this is one of the primary factors that’ll determine how much you’ll save over the long term – this, alongside your choice of fund (e.g. whether you’re a conservative, balanced or growth investor) and the level of contributions you make.
We’ve delivered results for our investors
Our active investment approach has helped us to deliver above-average long term returns for our investors, at lower-than-average fees relative to our competitors1.
In the latest Morningstar KiwiSaver survey, it’s pleasing to see that funds from our three KiwiSaver schemes are among the top five performing funds (on an after fee basis) in each of the categories where our funds are represented, over ten years. Some of the highlights are:
- The ANZ Default KiwiSaver Scheme Conservative Fund is ranked 2nd out of 9 funds in the Morningstar Conservative Category, while the OneAnswer KiwiSaver Scheme Conservative Fund is ranked 3rd in the same category2.
- The OneAnswer KiwiSaver Scheme Balanced Fund and the ANZ KiwiSaver Scheme Balanced Fund are ranked 3rd and 4th respectively out of 15 funds in the Morningstar Balanced Category2.
- The OneAnswer KiwiSaver Scheme Growth Fund and Balanced Growth Fund are ranked 4th and 5th respectively out of 16 funds in the Morningstar Growth Category2.
In fact, here’s something else to think about. An additional 1.0% per year in the after-fees returns of your fund could, over time, give you an additional $100,000 by the time you retire3. We think this highlights the importance of not using fees as your only consideration in choosing a provider.
How does our investment team stack up?
Of course, active management relies on the expertise of the investment team. So how does the ANZ Investments team stack up? Here’s what independent research house Morningstar had to say at its last formal review of our business:
“The depth and tenure of the ANZ investment team is unmatched amongst the KiwiSaver providers.”
Morningstar Research Report, published 29 September 20164.
Independent research houses, such as Morningstar, review each provider’s people, processes and performance on behalf of investors. Their ratings represent their view on how the provider is likely to perform in the future.
SuperRatings 2018 KiwiSaver Ratings4.
We're proud to have received SuperRatings' 'Platinum' rating for the fourth year in a row for all three of our KiwiSaver schemes. 'Platinum' is the highest rating available and is awarded to those KiwiSaver schemes that represent the “best value for money”.
Our active investment approach has delivered over the long term, through a focus on research, analysis and forming a view on both markets and individual investments. We’re proud of what we’ve achieved and we’d urge you to continue to look at the after fee returns of your investments over the long term, as well as all the other services and features you receive, to truly understand who the best providers are.
Based on the Sorted KiwiSaver fund finder tool
, which compares total fees (fund fees and membership fees), according to the most recent fund update or quarterly disclosure statement as at 22 January 2018, using an average KiwiSaver account balance of $13.7k.
- KiwiSaver Survey September Quarter 2017.
3Based on a 22-year-old contributing 3% of a $45,000 salary, along with employer contributions of 3%, until they’re 65.
For information about Morningstar and SuperRatings see here