BT Funds Management NZ (BTNZ) has sold down its global equity holdings in a fund operated by sister Australian firm in favour of direct mandates with a reduced range of underlying managers.
Following the change, implemented last week, the investment arm of Westpac NZ cut the number of underlying international share managers from seven to five, dropping Lansdowne Partners and AB (AllianceBernstein) in the process.
The remaining five global equity managers – AQR, Ardevora, MFS, River and Mercantile, and T Rowe Price – carry over from the previous BT Australia-operated fund.
Matthew Goldsack, BTNZ head of investment solutions, said the slimmed-down international share offering – now managed via a NZ-domiciled wholesale fund – still offered “good diversification”.
“And we now have direct control of the mandates,” Goldsack said.
BTNZ has also exited a short-lived exposure to the AMP Capital NZ-managed State Street passive global shares fund, which replaced Vanguard in the Westpac KiwiSaver default product only last December.
Under the revamped structure all BTNZ funds, including the Westpac KiwiSaver default fund, access global equities via the new multi-manager fund.
Goldsack said while the State Street passive exposure was relatively small (about $9 million), the new international shares arrangement enabled BTNZ to implement active strategies – such as responsible investment exclusions – across its entire global equities portfolio.
“If you have a responsible investment policy it has to be implemented consistently,” he said. “It’s hard to do that if you’re using other people’s funds.”
In April a BTNZ spokesperson told Investment News NZ (IN NZ) that the manager was progressively removing its exposures to munitions and tobacco from all its managed funds by restructuring its investment funds”.
“Exposures through international fixed interest are expected to be removed by the end of August 2017,” the spokesperson said.
According to the latest disclosure documents, BTNZ invests in global fixed income via the Australian-domiciled Advance Defensive Yield Multi-Blend Fund (a Westpac Australia subsidiary).
During the March 2017 quarter Westpac retail funds under management breached the $10 billion mark with just under half sourced through the bank’s KiwiSaver scheme, according figures from Melbourne-based consulting and research firm Strategic Insight.
The Westpac KiwiSaver scheme invested close to $770 million in the BT Australia international shares fund as at March last year.