AMP Capital NZ has appointed Australian boutique Ausbil as underlying manager in its diversified ethical funds amid a slew of changes that will also see an active global bond product close.
In disclosure documents filed last week, the manager revealed that AMP Capital Australia would wind up its ethical Australian shares product – currently part of the NZ diversified ethical fund suite.
“Therefore, the Manager has decided to redeem its holding in the Ethical Leaders Australian Share Fund and invest in the Ausbil ESG Focus Fund managed by Ausbil Investment Management Limited,” the document says. “The transfer to the new fund is likely to occur prior to 31 May 2021.”
Founded by Paul Xiradis in 1997, Ausbil has about A$13.7 billion under management across Australian and global equities strategies.
The NZ arm of AMP Capital, headed by Rebekah Swan, has also slated the $105 million Ethical Leaders Hedged Global Fixed Interest Fund for closure this June.
According to the disclosure material, investors in the multi-manager global bond product – which includes allocations to third-party managers Colchester, Morgan Stanley, Wellington as well as in-house – have until June 14 to either move to another AMP Capital NZ fund or redeem.
Officially, the Ethical Leaders Hedged Global Fixed Interest Fund will wind up on June 21 when the name will be repurposed for another AMP Capital NZ international bond product, albeit a passively managed option.
As of June 21 the Hedged Global Fixed Interest Index Fund will adopt the title of Ethical Leaders Hedged Global Fixed Interest Index Fund while also shifting to a new socially responsible Bloomberg Barclays benchmark.
Currently tracking a vanilla-flavoured bond benchmark, the Hedged Global Fixed Interest Index Fund reported over $660 million in assets under management as at the end of March.
Swan says in a client note: “The Ethical Leaders Hedged Global Fixed Interest Fund (AIF Q) is to be closed in the near future when a major client transfers out of the Fund. This requires the EL Diversified Funds to redeem its monies prior to the fund’s closure and invest in an alternative hedged global fixed interest strategy.
“As a result, the current investment in AIF Q will transition to the Ethical Leaders Hedged Global Fixed Interest Index Fund (AIF PQ). This will provide exposure to hedged global fixed interest while continuing to be aligned to the Fund’s responsible investing philosophy through using an ESG style index.”
Fees in the AMP Capital NZ Ethical Leaders conservative and balanced funds will drop by 0.1 and 0.05 per cent, respectively, after allocating to the new passive global fixed income strategy.
The NZ manager also closed its commodities fund this February after a review deemed the product “no longer viable”.
At the same time, AMP Capital NZ is bracing for a huge funds outflow as the local AMP wealth management firm swings to index investing with BlackRock as partner. The AMP NZ wealth business gave notice to AMP Capital in October 2020 with up to $10 billion likely to move homes as a result by the middle of this year.
But the latest AMP Capital NZ fund tweaks come during a wave of rationalisation across the entire ASX-listed AMP group.
As revealed last month, AMP is poised to split its funds management capabilities three-ways; spinning off the more profitable private markets business into a separate listed entity, bringing externally managed funds (the multi-asset group – or MAG) under AMP Australia control, and either selling or entering a joint venture for the in-house managed global equities and fixed income (GEFI) assets.
And in addition to closing the Ethical Leaders Australian Share Fund, last week AMP Capital Australia also wound up the A$180 million Dynamic Markets Fund, citing “fixed operating expenses, [that] will likely lead to an increase in management costs”.
“Closing the fund is in the best interests of investors,” the AMP Capital Australia statement says.