Betashares has landed a substantial global equities NZ institutional mandate with insurance firm AIA while launching a hedged version of an existing portfolio investment entity (PIE) fund seeded by the new client.
The just-released NZ dollar-hedged Betashares Global Sustainability Leaders Fund joins the current roster of five PIEs rolled-out by the Australian exchange-traded fund (ETF) specialist earlier this year.
AIA NZ will invest in both the existing Global Sustainability Leaders Fund and the new hedged version, according to Nick Sutherland, acting chief product and investment officer for the life insurer – the largest in NZ.
Sutherland said the group had invested about $65 million from its non-linked investments portfolio into the Betashares funds.
“Previously we used a mix of in-house and external managers across a broad range of jurisdictions,” he said.
It is understood the AIA external funds were largely managed by Commonwealth Bank of Australia (CBA) subsidiary, ASB, which was the former owner of Sovereign insurance. AIA bought Sovereign in 2018 as part of a $4.15 billion bundle deal that included the CBA-owned Australian business, Comminsure.
Sutherland said in release that the Betashares allocation followed a “detailed scoping and review of investment solutions”.
In September this year, AIA confirmed Smartshares as the underlying manager for its approximately $500 million book of investment-linked legacy products.
The Betashares mandate would have “no impact on our allocation with Smartshares”, Sutherland said.
As at the end of 2022, the insurance firm also recorded about $1.6 billion of investments including $630 million or so in equities.
In a statement, Vinnie Wadhera, Betashares head of institutional and adviser services, said the manager was “very pleased to have been awarded this investment allocation by a highly regarded institution”.
“We’re looking forward to further developing our investment capabilities and expertise with New Zealand asset allocators and institutional investors to help them build better portfolios with our innovative range of investment solutions,” he said.
Betashares formally entered the NZ market this June with the launch of five PIEs covering Australian equities, bonds and global shares (including the sustainable fund) and hired former Smartshares chief, Hugh Stevens, last month as NZ executive director.
The Betashares Global Sustainable Leaders strategy follows the Nasdaq Future Global Sustainability Leaders Index, comprising about 200 stocks. To date, the ASX-listed ETF version of the Betashares global sustainable fund has accrued about $2.7 billion in assets under management, the release says.
Due to hit retail platforms soon, the new Betashares fund carries an annual management fee of 0.79 per cent compared to 0.77 per cent for the unhedged variety.