The almost $400 million Aurora KiwiSaver scheme has reshaped its underlying manager line-up with three new global equity specialists replacing incumbents.
As part of the refurbishment, the three Aurora-appointed managers – Brandywine Global, Pella and Munro Partners – have all launched portfolio investment entity (PIE) products to access NZ tax benefits for investors.
Following the new hires, Aurora has dropped Dimensional Fund Advisors and the First Sentier-owned Stewart Investors from its international shares panel.
Sean Henaghan, Aurora Capital chief investment officer, said both Dimensional and Stewart had performed as expected but the change reflected a shift to a more flexible, defensive stance for the group’s global equities portfolio – currently hovering around $120 million.
The Franklin Templeton-owned Brandywine Global is the latest to join the PIE parade after both Pella and Munro Partners released products for the NZ market over the previous few weeks.
Brandywine Global first launched a PIE in 2018 with the Global Opportunistic Fixed Income Fund (previously popular in NZ under an Australian unit trust structure) but the new product brings an unfamiliar international shares strategy to the market.
Like Pella and Munro, the Brandywine Global fund invests in a concentrated portfolio of stocks, currently about 65 holdings, albeit with a strong value flavour compared to the growthier leanings of the two complementary Aurora managers in the asset class.
Henaghan said Pella fills the core global shares role in the Aurora portfolio with Munro and Brandywine Global providing respective growth and value roles.
In addition to “hard to find” value tilt with sustainable credentials, he said the Brandywine Global strategy is informed by solid, top-down macro research.
As at last week, the staged global shares transition process was about 60 per cent complete, Henaghan said.
In a release, Felicity Walsh, Franklin Templeton Australia and NZ managing director, said: “At any given time, the Brandywine Global team’s investment process remains aware of the broad market’s country allocations, which currently include around 65% exposure to the US.
“However, as active value managers, the team builds a portfolio from the bottom up, which leads the portfolio currently to markets like Europe, Latin America and Core Asia (China), with the input of the Brandywine Global macro team as a key differentiator.”
Established in 2013, the Brandywine Global fund – co-run by portfolio managers, James Clarke and Sorin Roibu – has about US$700 million under management with an annualised net return of roughly 9.2 per cent compared to almost 10 per cent for its benchmarks.
The new PIE carries a price-tag of 0.93 per cent.
As per its fixed income counterpart, the Brandywine Global international equities PIE is hosted by FundRock with BNP Paribas Fund Services as custodian and administrator, Apex providing registry and Public Trust serving a supervisor.
Pella also uses FundRock as PIE-host while Munro selected Adminis for the job to under a wholesale-only structure.
Other managers in the Aurora line-up include First Sentier for global listed infrastructure, Kernel and Mint in NZ equities and the Manulife Affirmative Green Bond Fund.
In February this year, Aurora hired ex Fisher Funds executives, Marcus Wild and Sharon Mackay, as chief client officer and CEO, respectively.
The manager has also seen an investment team change with Stefan Smith replacing analyst, Thomas McRobie, who moved recently to Amsterdam. By coincidence, Smith was previously a financial risk analyst at Dutch pension fund, NM.
Since launching in 2021, the Aurora KiwiSaver has been one of the fastest-growing schemes by distributing through associated adviser networks.
Originally, the scheme was sold exclusively through the Simon Rolland-founded Aurora Financial Services group. Last year Rolland offloaded the Aurora advisory arm to interests associated with the Haven mortgage and life insurance advice group, which rebranded the business as Enva.
Both Haven and Enva advisers now sell the Aurora KiwiSaver.