About 60 people have already signed up to a new KiwiSaver investment research service, according to Peter Urbani, founder of KnowRisk Consulting.
Urbani said KnowRisk, which currently offers two KiwiSaver research tools, would initially target the Authorised Financial Adviser (AFA) market but could eventually attract a wider retail client base.
“But given the sophisticated nature of the KnowRisk statistics, more realistically I expect about 5 to 10 per cent of the AFA population [would be interested],” he said.
The KnowRisk tools, supplied as searchable spreadsheets at $50 a pop, enable investors to compare just under 100 KiwiSaver products across a range of metrics.
“Examples of statistics currently only I am offering include, maximum drawdown, expected shortfall in both normal, modified (four moment) and best fit (fat tailed) formats,” Urbani said.
He said users could model over 100 statistical scenarios.
The products use quarterly KiwiSaver data supplied by providers to the Financial Markets Authority as well as “fund time series data from Morningstar Direct and the funds directly”.
According to Urbani, the KnowRisk tools were unique in the NZ market, with only limited paper-based and online alternatives offered elsewhere.
He said while the Sorted KiwiSaver fund finder (which also uses the FMA data) provides “adequate basic information for retail investors” it doesn’t offer risk analysis.
“In most countries (including Australia) this information is also statutorily required,” Urbani said.
Research houses, such as Morningstar and Aon, do supply a free paper-based KiwiSaver research report with some basic risk analysis, but he said the KnowRisk tools cost “half of the lowest price FundSource is charging for a non-searchable paper based offering”.
“[FundSource] charges $750 for the current quarter and $99 for prior quarters,” Urbani said.
“Bearing in mind the relatively low update frequency (quarterly) and small numbers I don’t think my price is unreasonable.”
While the KiwiSaver Ranking Tool allows investors to query funds based on risk, return and other statistics, Urbani said the Funds Dashboard is designed to provide quick assess to information “relative return, risk, persistence, and costs” of products in the database.
“By varying the weightings on these – [Funds Dashboard] users can come up with their own composite fund percentage score,” he said.
While KnowRisk restricts KiwiSaver products on its database to those that provide time-series data going back five years, Urbani said he may loosen that restriction to three years, “which will increase the number of funds shown”.
He said KnowRisk was also about to launch a new Fund Reports tool that would provide “risk and return attribution analysis and basic style analysis comparing individual funds asset level allocations to their stated benchmark allocations and performance”.
The South African-based Urbani has a background in risk management techniques and portfolio construction, most recently as chief investment officer for hedge fund of funds business, Infiniti Capital.
Infiniti has offices in Hong Kong and Christchurch.