Pie Funds new global strategy is paying off
Pie Funds change of investment strategy is paying off with top placings in the latest Morningstar KiwiSaver report.
Monday, May 25th 2026, 10:17AM
Founder and Chief Investment Officer Mike Taylor says a number of years ago he realised the investment process for global shares needed to change following some disappointing performance.
It's not the first time the firms global equities strategy has changed. Originally it was a fund of funds approach and later moved to in-house management and now to a new strategy which has a strong quantitative focus underpinning it.
Taylor says getting it right was important, especially for the firm’s KiwiSaver products, as they have a large exposure to international equities.
Part of the problem was the universe of small cap stocks in the international equities is large at around 11,000 companies, compared to 400 in Australasia and it was difficult to identify investment opportunities.
“We were just finding that we weren't really uncovering (companies)”, he says. “We weren't able to turn over all the rocks.”
Taylor worked with an analyst and, using Pie's investment strategy, they developed a way to quantitatively screen the 11,000 companies. This effectively provided portfolio managers with a ranking system.
The implementation, once the move had been “green-lighted” by the board, proved challenging as it happened right in the middle of the US’s tariff war.
“It wasn't easy to do,” Taylor says especially as “almost the entire portfolio got turned over.”
Now the system is in place Pie has a much better understanding of where it is taking risk.
“We are more focussed on where we're taking our risk. Where does our active risk come from? Is it coming from currency? Are you coming from sectors? Is it coming from regions?”
In the latest Morningstar report Pie Funds had the number one placing for its Balanced and Aggressive funds.
Taylor says “if we hadn't changed this strategy, we would have wound up like, with a performance similar to some of our New Zealand peers, who's already struggled last 12 months in global equities.”
The strategy aims for returns 2 to 4% above the benchmark. Taylor says they won’t do that every year but the new strategy is less likely to produce large under performance.
“We think it's more repeatable than what we were doing previously. We think the risk of us being 10% behind benchmark is very low.”
Taylor says the strategy has only been in place for 14 months and he is happy with the results.
Reflecting on the change, Taylor says, “Sometimes you have to sort of fail at something to realise you need to redo it differently.”
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