About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, June 29th, 4:23PM
rss
Latest Headlines

AJ takes high ground with new fund

Armstrong Jones chief investment officer David McClatchy reckons that a number of New Zealand share funds are disguising their true performance by investing in Australian shares while keeping a NZSE benchmark.

Tuesday, June 12th 2001, 10:58PM

by Philip Macalister

Armstrong Jones chief investment officer David McClatchy reckons that a number of New Zealand share funds are disguising their true performance by investing in Australian shares while keeping a NZSE benchmark.

McClatchy says many NZ equity funds have changed their mandates so they can invest in Australia, yet they continue to use NZSE indices as benchmarks.

"It's absolute nonsense," he says. "You can't tell whether (a manager) is doing a great job."

This creep has lead to an increasingly wider range of returns reported by so-called NZ equity funds.

Also this creep has hit AJ's locally domiciled unit trust which continues to invest solely in New Zealand. Over the years its ranking against its peers has fallen, while the range of returns reported by NZ share funds has increased.

AJ is taking the high moral ground on this issue with the launch of its own Australasian share fund (which is an UK-based open-ended investment company managed by Edinburgh Fund Managers).

McClatchy says the fund is benchmarked against a composite index which is 50% NZSE40 and 50% ASX200.

The company studied various ways of developing a suitable benchmark including having one which was weighted on the relevant capitalisation of each market (such a benchmark would be heavily in Australia's favour as its market capitalisation is about A$700 billion compared to $42 billion in New Zealand).

Instead the benchmark was worked out on what would have provided the best performance over the past 20 years.

McClatchy says their research revealed that New Zealand had marginally outperformed Australia over the last two decades.

On an unhedged basis the optimal mix was 60:40 to New Zealand. However, on a hedged basis the result was the other way around.

McClatchy says that a 50:50 mix was "a prudent starting point".

Currently the fund is invested 50:50 between Australia and New Zealand, however McClatchy expects that the weighting will move in Australia's favour throughout the year.

In an unusual move AJ are offering an incentive for advisers to put their client's money into the fund.

For every $50,000 of new money put into the fund, advisers get one entry in the competition. First prize, valued at $11,000, is a trip for two to Edinburgh in Scotland with five night's accommodation, plus £500 spending money.

The second prize, valued at $5,000, is a trip for an adviser and one client to the Bledisloe Cup match in Sydney.

The prizes are being put up by Edinburgh.

AJ National sales manager Wayne Becker insists that advisers who enter this competition must disclose this fact to their clients.

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

« First Metropolis repayment plan turned downSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • FMA says commission drives churn
    “I agree with Brent Sheather on his points. While I'm disgusted by the fact that there are some 'advisers' out there behaving...”
    2 hours ago by AFA Muggins
  • FMA says commission drives churn
    “I know nothing about insurance or commission but the FMA frequently seem to find reasons why they should not look closely...”
    4 hours ago by Brent Sheather
  • Associations expecting 'yes' vote
    “Hi Fred We might as well continue this in the full glare of the public. It might be a clarifying exchange for all. If it's...”
    5 hours ago by Murray Weatherston
  • FMA says commission drives churn
    “Reading this article, the report and the comments, on balance, the report has missed the opportunity. The first-page statement...”
    5 hours ago by RiskAdviser
  • FMA says commission drives churn
    “There are those companies (probably all if they are honest) that incentivise churn. As a trustworthy adviser, you can always...”
    6 hours ago by work for your client
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.64 4.75 4.85 4.99
ANZ Special - 4.25 4.35 -
ASB Bank ▲5.65 4.69 4.75 4.89
ASB Bank Special - 4.25 4.19 4.39
BankDirect ▲5.65 4.69 4.75 4.89
BankDirect Special - 4.25 4.19 4.39
BNZ - Mortgage One 6.30 - - -
BNZ - Rapid Repay 5.75 - - -
BNZ - Special - 4.25 4.19 ▲4.49
BNZ - Std, FlyBuys 5.69 4.85 4.89 4.99
BNZ - TotalMoney 5.69 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 5.95 4.99 4.99 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 5.60 4.85 4.90 -
Housing NZ Corp 5.55 4.69 4.85 4.99
HSBC Premier 5.75 4.19 4.19 4.49
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.60 4.39 4.69 4.99
Kiwibank 5.45 4.70 4.75 4.49
Kiwibank - Capped - - - -
Kiwibank - Offset 5.50 - - -
Kiwibank Special - 4.29 4.15 -
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.10 4.85 4.99 -
NZ Home Loans 5.85 4.69 4.75 4.49
NZ Home Loans - Specials - - - -
Lender Flt 1yr 2yr 3yr
NZ Home Loans - Specials - 4.19 ▲4.19 4.39
Perpetual Trust 7.70 - - -
Resimac 5.34 4.95 4.99 5.05
SBS Bank 5.59 4.75 4.89 4.99
SBS Bank Special - 4.10 4.19 4.65
Sovereign 5.65 4.69 4.75 4.89
Sovereign Special - 4.25 4.19 4.39
The Co-operative Bank 5.45 4.25 4.29 4.49
TSB Bank 5.54 4.75 4.75 4.99
TSB Special - 4.25 4.19 4.59
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 5.75 4.79 4.85 4.99
Westpac - Capped rates - 5.15 5.25 -
Westpac - Offset 5.75 - - -
Westpac Special - 4.25 4.29 4.49
Median 5.75 4.69 4.75 4.89

Last updated: 29 June 2016 5:00am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com