2 Comments 2 CommentsThe bank has entered into a strategic partnership with BlackRock to help manage the $20 billion it has in funds under management across KiwiSaver and its other managed funds.
BlackRock will provide asset allocation and currency advice to ASB. Unlike AMP it is not moving to use any of BlackRock's funds.
ASB executive general manager Private Banking, Wealth and Insurance Adam Boyd says asset allocation and currency are the two main drivers of returns.
Modelling done by the bank shows the move to BlackRock will provide better returns for its KiwiSaver members and investors.
“We have invested in world-class expertise to manage our asset allocation and currency decisions as we see these as the most significant driver of fund performance,” he says.
Previously asset allocation and currency was done in house at the bank with the support of external advisers.
Boyd says investment decisions will be quicker and more efficient now it has started using BlackRock.
The cost of BlackRock's services will be covered by the bank, rather than increased fees on its products.
“Our intent is to build on the solid history of performance across our funds and deliver even better investment outcomes for customers," Boyd says.
"The BlackRock Multi-Asset team that will manage our investments has a very strong track record.”
Individual asset classes, for example Australasian equities or international bonds, will continue to be managed by a number of local and international investment firms, overseen by ASB in collaboration with BlackRock.
The majority of ASB's funds use passive managers including Vanguard, BlackRock, StateStreet and First Sentier Investors. It also uses First Sentier Investors and Mercer for the few funds which have active management.
Head of BlackRock Asia Pacific Rachel Lord says in a statement the partnership with ASB is unique in the region in that it encompasses the entire investment platform.
“We are excited to bring the full breadth of our global investment expertise as well as our end-to-end investment and technology platform to ASB. We look forward to helping to deliver an enhanced offering to its investment customers.”
Boyd describes BlackRock as a global thought leader in the responsible investment space and its values are strongly aligned with ASB’s.
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