The Cook Islands National Superannuation Fund (CINSF) has decided to replace the actively managed Russell multi-manager funds with a passive ‘reference portfolio’ of global equities and bond products offered under the Smartshares sub-brand, SuperLife.
This month CINSF will transfer its assets to a reference portfolio composed of international bonds and equities using Smartshares’ SuperLife Total World (NZD Hedged) & (Unhedged) Funds – both of which access the Vanguard Total World Stock ETF, tracking the FTSE Global All-cap Index for its equity exposure and Smartshares’ SuperLife Global Aggregate Bond Fund, which accesses the iShares Core Global Agg Bond UCITS ETF tracking the Bloomberg Global Agg Index 100% hedged to the NZD.
This Reference Portfolio forms the basis for CINSF market exposure against which all future active management endeavours will be measured for their capacity to add value.
Smartshares chief executive Hugh Stevens said the decision will "improve efficiency" of the super fund.
"The work we are doing together demonstrates Smartshares’ ability to provide regional investors with tax effective access to global investment opportunities."
CINSF chief investment officer David Brown said the Rarotonga-based fund has found a cost-efficient New Zealand dollar vehicle to back its pension obligations in the currency used here in the Cook Islands.
“We are delighted to initiate this partnership with Smartshares, a subsidiary of the NZX group of companies and believe their flexibility and willingness to think out of the box to accommodate our specific requirements has been very helpful.”
The $200 million fund is the only one of its kind in the Cook Islands and works independently of the Cook Islands Government to save for retirement of all those working in the country. The fund invests 5% member plus 5% employer contributions to ultimately pay a pension for life and the life of surviving spouses over the retirement age of 60. With over 12,800 Members, the fund is growing in size at approximately 8% a year.
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