• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer
  • Subscribe
  • Twitter
  • RSS Feed

Investment News NZ

Investment News provides financial advisers news stories from the financial industry in New Zealand. Subscribe to our free weekly newsletter.

  • Home
  • News
  • Kiwisaver
  • Subscribe
  • About
  • Advertise
  • Contact
You are here: Home / Investment News / Alternative viewpoint gets airing in Aon show

Alternative viewpoint gets airing in Aon show

June 22, 2015

Guy Fisher: Aon investment consultant
Guy Fisher: Aon investment consultant

New Zealand investors are slowly warming to the idea of alternative asset classes, according to Guy Fisher, Aon Hewitt investment consultant.

Fisher said while local wholesale investors are generally underweight alternative assets relative to global peers “there’s a genuine broad interest in the topic now”.

He said as traditional asset class valuations appear stretched and cash rates at all-time lows, NZ investors were keen to explore other options.

“Just selling equities in exchange for bonds or cash presents challenges in terms of the unattractiveness of expected returns of these two simple alternatives,” Fisher told the 100 or so investors who attended the Aon alternative investments roadshow held in Auckland and Wellington last week.

Fisher said NZ investors have trailed the global trend to alternatives – which has seen, for example, offshore pension funds allocate an average 25 per cent to the asset class – for several reasons.

“Performance has been part of it,” he said. “Investors have done well in recent years without looking beyond vanilla asset classes.”

As well, alternative product choice was very limited in New Zealand, Fisher said.

“Three years ago there was really only one alternative product,” he said. “Now there’s four primary ones. And more products would come if there was demand.”

Concerns about fees, complexity and liquidity have also scared investors off alternatives.

“But they’re reasons to be careful about which products you invest in, not an excuse to avoid the entire sector,” Fisher said.

Furthermore, investment consultants “haven’t really rushed” to research the alternatives space.

While a few larger traditional super funds and charities have shown some appetite for alternative assets, he said the burgeoning KiwiSaver market largely avoided the option.

According to Fisher’s analysis of the latest statutory KiwiSaver data, only 1.7 per cent of scheme assets were invested in alternatives (officially described as ‘unknown/other’), which was above the reported target allocation of 1.2 per cent but still represented a paltry $446 million.

The analysis identified only five schemes invested in the ‘other’ category: AMP, Aon, Mercer, Westpac and Kiwi Wealth. Fisher said a large portion of that was commodities or infrastructure products rather than true absolute return strategies.

“ANZ and ASB, which together account for more than 50 per cent of KiwiSaver members, don’t have any alternatives exposure,” he said.

According to Fisher’s research, of the roughly $26 billion in KiwiSaver as at March 31 this year, a whopping $4.7 billion was in cash – representing a 2.7 per cent overweight position relative to reported scheme targets.

With worries about equity and bond markets “there’s nowhere else for [KiwiSaver funds] to be”, he said.

Overall, NZ investors can see the dilemma posed by fully-valued equities and a fixed income market unlikely to offer the same portfolio protection as in the past.

“But they don’t know what to do about it,” Fisher said.

Print Friendly, PDF & Email
Twitter0
LinkedIn0
Google+0
Facebook0

Read More » Investment News

Recent articles

  • New Salt suite to spice up fund mix January 17, 2021
  • Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman January 17, 2021
  • Westpac follows ANZ with Northern Trust mandate… January 17, 2021
  • … as Trust Management wins over another senior BT investment hand January 17, 2021
  • Capital ventures into BlackRock’s ETF territory January 17, 2021
  • Fresh CIO role as South Pacific aims for co-investments January 17, 2021
  • Lessons from 2020: don’t stop thinking about tomorrow January 17, 2021
  • SSGA to push big firms on ESG, stays mum on merger January 17, 2021
  • Low-carbon switch: why electric future turns on listed infrastructure investor January 17, 2021

Primary Sidebar

WEEKLY NEWSLETTER

Sign up here to receive our weekly newsletter.
Learn More »

Most Recent Investment News

New Salt suite to spice up fund mix

January 17, 2021

Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman

January 17, 2021

Westpac follows ANZ with Northern Trust mandate…

January 17, 2021

… as Trust Management wins over another senior BT investment hand

January 17, 2021

Capital ventures into BlackRock’s ETF territory

January 17, 2021

Search by Keyword

Investment News

  • New Salt suite to spice up fund mix January 17, 2021
  • Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman January 17, 2021
  • Westpac follows ANZ with Northern Trust mandate… January 17, 2021
  • … as Trust Management wins over another senior BT investment hand January 17, 2021
  • Capital ventures into BlackRock’s ETF territory January 17, 2021
  • Fresh CIO role as South Pacific aims for co-investments January 17, 2021
  • Lessons from 2020: don’t stop thinking about tomorrow January 17, 2021
  • SSGA to push big firms on ESG, stays mum on merger January 17, 2021
  • Low-carbon switch: why electric future turns on listed infrastructure investor January 17, 2021
  • Bitcoin: the nonsensical asset that makes sense for the times January 17, 2021

Investment News Archive

Most Popular Articles

  • Westpac NZ flags retail advice sale to Forsyth Barr posted on October 19, 2020
  • NZ share-trading splurge could trigger tax alarms… posted on October 5, 2020
  • The horror year in technicolour: free KiwiSaver 13 report released posted on September 30, 2020
  • Flint set to spark platform competition posted on August 17, 2020
  • Four to the core: Smartshares to expand, rearrange and reprice ETFs posted on June 22, 2020
  • Kitset KiwiSaver scheme set to unwrap in spring posted on April 27, 2020
  • Funds eye bargains, self-shoppers hoard cash, KiwiSavers turn conservative posted on March 15, 2020
  • AMP Capital NZ chief quits amid equities exodus offshore posted on August 28, 2020

Sponosored Content

David-Boyle

On the industry play-list: four chart-topping regulations for 2021

David-Boyle

Charge of the lite (advice) brigade

Nathan Field

Pandemic Baby Boom a Bust

Star-date 2020: it’s inflation Jim but not as we know it

Quick-links to Popular News

  • FAP Compliance
  • Coronavirus
  • New Appointments
  • Financial Markets Authority (FMA)
  • Kiwisaver
  • Climate Change
  • Crypto Currency
  • Blockchain
  • Insurance

Secondary Sidebar

Recent News

  • New Salt suite to spice up fund mix January 17, 2021
  • Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman January 17, 2021
  • Westpac follows ANZ with Northern Trust mandate… January 17, 2021
  • … as Trust Management wins over another senior BT investment hand January 17, 2021
  • Capital ventures into BlackRock’s ETF territory January 17, 2021
  • Fresh CIO role as South Pacific aims for co-investments January 17, 2021
  • Lessons from 2020: don’t stop thinking about tomorrow January 17, 2021
  • SSGA to push big firms on ESG, stays mum on merger January 17, 2021
  • Low-carbon switch: why electric future turns on listed infrastructure investor January 17, 2021
  • Bitcoin: the nonsensical asset that makes sense for the times January 17, 2021

Footer

Copyright ©2020 InvestmentNews.co.nz — All Rights Reserved ·— Terms & Conditions