National Mutual is backing active management of equities, but is about to launch a passively managed New Zealand share fund.
The Kiwi Share Index Fund is expected to be up and running in early December, and when it opens it will sit alongside its actively managed cousins the NM Selected Equities and the NM NZ Leaders Trust.
NM Funds Management believes it can provide higher, net of tax returns over a three year period by actively managing New Zealand shares than is possible through passive management.
"However, we believe there's a place for tax-advantaged passive index funds as part of an investor's core portfolio," it says in a recent newsletter.
Its Kiwi Share fund will track the Russell/Ord Minnett Tradeable index, which is designed to mirror the NZSE40 index while concentrating on only the more liquid and therefore more tradeable shares in that universe.
While the NZSE40 is the broadest index in New Zealand some of the stocks within it are very illiquid.
Shares in the Russell/Ord Minnett Tradeable index are reasonably liquid and therefore less likely to mispricing due to low volumes being traded.
Also, NMFM plans to launch an international equity fund next year.
National Mutual is backing active management of equities, but is about to launch a passively managed New Zealand share fund.