NZ Funds cuts ties with Morningstar

NZ Funds has opted not to submit information to Morningstar’s fund database, driven by concerns about a lack of ability to compare life stages funds appropriately.

Saturday, May 2nd 2020, 9:18PM

Michael Lang

The decision means its KiwiSaver funds did not appear in the performance tables of the March quarter KiwiSaver survey.

Chief executive Michael Lang said Morningstar’s approach of putting NZ Funds’ lifecycle-style KiwiSaver fund in the “miscellaneous” category and comparing the components within it was an inaccurate representation.

People would move through each asset allocation according to their age, which would give a better result overall, compared to standard funds, than the comparison might suggest. “It doesn’t represent what we are actually doing.”

He said Morningstar also struggled with NZ Funds’ dual fee levels and there was little benefit to clients or advisers in being part of its tables.

It had had research done by MyFiduciary, which was a deeper dive into the funds that advisers could use, he said.

He said, if Morningstar were to come up with a more effective way to compare the funds, NZ Funds would reconsider its stance.

“Every month we publish every security we own in our portfolio and all the returns from that. We are 100% transparent.”

Morningstar’s data director, Asia Pacific, said he hoped NZ Funds would rejoin.

“We have life stages, target date, glidepath funds added to our database. They are very common vehicle types globally, especially in the US. In fact we have the Aon Target Date, and AMP life stages funds included in our database – and have done so for years.

“If they had Lifestage KiwiSaver funds with pricing and unit holders, etc there is absolutely no reason we couldn’t add them.”

“Also, we are curious as to the link between removing 10 or so live investable unit priced funds with existing and ongoing investors – and – us not wanting to display these life stage models we have never maintained.”

Tags: KiwiSaver Morningstar NZ Funds

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