by Jenny Ruth
Some of the sector nominations for this year’s FundSource Fund Manager of the Year awards have proved controversial.
Why, for example, were any of NZ Funds Management’s sector funds included when that company has stopped providing FundSource with performance information? And why did the NZ Funds’ New Zealand Income Trust make it among the three finalists for the New Zealand cash management award?
NZ Funds’ trust’s performance ranked fifth out of 13 funds in the three years ended 30 June while the other two nominees, the Guardian CashPlus Fund and the AXA Cash Management Fund ranked first and second respectively over the same three years.
Similarly, why did Guardian Trust’s property fund join the other two nominees in the property fund sector when its performance clearly lags that of its fellows? Its fund ranked 12th out of 12 funds in the year ended 30 June. Why wasn’t ANZ’s property trust a finalist when its performance is superior to any of the three nominees? It’s fund’s performance ranked second out of 13 funds in the three years ended 30 June while the next best performer over that period, ING NZ’s, ranked third and the other nominee, Tower’s PropertyPlus Fund ranked sixth.
Why is AXA’s Australasian Selected Equities fund among the six nominees for the New Zealand equity sector?
Why isn’t BT Funds Management’s diversified growth fund nominated in that sector when it clearly outperformed the only nominee, NZ Funds’ Capital Growth Trust?
FundSource business manager Tim Anderson says many of these queries reflect a lack of understanding of how the awards process works.
ANZ’s property fund, for example, has only $2 million invested in it whereas a fund needs at least $10 million in it to qualify.
NZ Funds’ qualifies for some of the sector awards because it only stopped providing the required information after the June 30 cut off, Anderson says.
"There are filters that the funds have to go through before reaching nomination," he says.
For example, funds have to have an average 4 star or greater FundSource rating over the past six months to qualify. BNZ’s International Bond Trust fell out of the running because its rating slipped to 3.7 stars.
AXA’s equity fund made it through the filters for the New Zealand equities sector because only 15% of its fund is invested in Australian equities whereas the FundSource filter allows for up to 30% to be invested in Australia.
AMP Henderson’s equities fund didn’t make that category because it failed the test requiring it to have retained key people for at least two years. That’s because it lost former equities manager Stephen Walker and his offsider Craig Brown last year.
BT’s diversified growth fund missed out this year because of its takeover by Westpac and the loss of key investment people in Australia where some of the fund is invested. Still, BT retains its key New Zealand equities people including manager Andrew South so its New Zealand equities fund still makes it into that sector.
BT is also excluded from the overall award because of the takeover. Why, when the awards are based on historical performance and the takeover didn’t happen until August?
"People do use these awards to select managers and we have a duty to those people, " Anderson says. FundSource has downgraded all BT’s funds to a "hold" because of the takeover and the potential for cultural clash and other problems between the two organisations, he says. "BT knows it’s not in the running."
| « GST on brokerage fees | Sovereign takes regulation bull by the horns » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved