The Public Trust has garnered about $360 million in funds under management across its recently rejigged diversified investment products.
After closing 10 retail fund products and “releasing” a further six from public offer compliance duties in 2014, the Public Trust launched a new range of seven investment portfolios in July of that year.
The Public Trust Diversified Funds have been structured to fall outside the Financial Markets Conduct Act (FMC) borders.
According to a Public Trust spokesperson, the Diversified Funds approach reflected new priorities for the organisation.
“Like all businesses ours has changed over time, our focus is on providing trustee services which is why our Diversified Funds offering is not open to the general public,” the spokesperson said. “We use this solely for Public Trust customers where we are acting as trustee, co-trustee or attorney of an estate, trust or non-consultable agency. As a result the funds are exempt from complying with FMC regulations for public offers.”
Almost $220 million of the total $360 million was invested in the balanced portfolio, according to the latest Diversified Fund disclosure documents.
Public Trust follows a ‘smart beta’ investment philosophy with Colonial First State subsidiary, Realindex, filling the slot in global equities with remaining assets managed in-house.
“Using this [enhanced index] approach a range of metrics is used to weight securities in a portfolio. These metrics do not include market capitilisation. Securities are not actively traded and qualitative decisions are not made on when to buy or sell,” the Diversified Fund disclosure document says. “We have adopted the enhanced indexing strategy for all asset classes.”
Management fees for the Public Trust funds range from 1 per cent for the cash portfolio to 1.39 per cent for the growth fund (including third-party management fees of 0.14 per cent).
As well as the Diversified Funds, Public Trust offers an investment service held on a wrap, backed by NZX-owned platform Apteryx, targeting wholesale punters.
The Public Trust portfolio review committee makes investment calls on both the funds and DAS with external advice provided by Russell Investments and Craigs
However, like the Diversified Funds offer, the DAS is used by the Public Trust in its official capacity as estate trustee etc.
“The service is not open to members of the public,” the DAS disclosure document says.
The Public Trust spokesperson said the DAS approved list “and the amount invested through this service are commercially sensitive”.
According to the latest NZX information release, Apteryx reported funds under administration of just above $1.3 billion as at the end of February this year. It is understood about $650 million of Apteryx funds under administration comes via the platform’s ex-owner, NZAM.
The Public Trust spokesperson said the “relationship with Apteryx” covers the DAS funds “and the provision of corporate trustee services to other Apteryx platform users”.
In the 2015 Public Trust annual report, CEO Bob Smith, said the government-owned organisation had invested “more resources” into its corporate trustee services division.
“Working with our strategic partner Apteryx… we are well placed to grow our custodial business,” Smith says in the report.