Kiwi Wealth has created a new suite of retail funds that it is understood will back into the group’s recently-approved robo-advice service.
The Kiwi Wealth Managed Funds range of three risk-weighted products will in turn invest via a couple of new wholesale funds offered by sister entity Kiwi Investment Management (KIM).
Unlike the Kiwi Wealth KiwiSaver scheme, the new retail products – covering conservative, balanced and growth risk settings – have outsourced “some of the administration functions including registry services and unit pricing for the Scheme”, the offer document says, with Auckland-based MMC picking up the gig. Public Trust will retain the supervisor role it holds with other Kiwi Wealth products.
The document says the Kiwi Wealth retail funds would “initially invest… in the Kiwi Wealth Growth Fund and the Kiwi Wealth Fixed Interest Fund”, offered by KIM.
Previously known as GMI Wealth (a vestige of its roots as Gareth Morgan Investments), KIM provides investment services to the wider group. KIM has just launched four wholesale portfolio investment entity (PIE) funds labeled Growth, Fixed Interest, Core Global and Cash.
Peter Verhaart, KIM head of wholesale and private investment, said the new PIE range offered a unique point of difference.
“We believe the New Zealand wholesale market needs a fund manager that is entirely focused on New Zealand investors, where the profits are retained in a New Zealand-owned corporate group for the ultimate betterment of New Zealanders – not individual shareholders or foreign owners,” Verhaart said in a statement.
“… Our wholesale funds hold the assets themselves making them tax effective, provide our clients with transparency down to the stock level…”
The KIM PIEs would also invest globally from the group’s NZ base, according to Kiwi Wealth chief investment officer, Simon O’Grady.
“Our starting point is the world, and in this day and age technology makes it possible to manage global assets from New Zealand,” O’Grady said in the release. “Our track record shows that our highly qualified and experienced investment team can foot it with the best of them.”
He said the new PIEs would also tap into Kiwi Wealth’s environmental, social and governance (ESG) management style “that is sought after by our private clients and members of the Kiwi Wealth KiwiSaver Scheme”.
Last August Kiwi Wealth KiwiSaver scheme swapped about $660 million from a Vanguard global equities fund to a purpose-built in-house product to accommodate its new ESG policies.
Both the new Growth and Fixed Interest funds would take an active investment approach with the former focused mainly on global assets and the latter a mix of NZ and offshore securities.
However, the Core Global fund would invest in a “diversified portfolio of global share investments with enhanced index management” in both hedged and unhedged options.
Kiwi Wealth, ultimately owned by the NZ government, manages over $5 billion including more than $3 billion in the group’s KiwiSaver scheme.