Russell Investments is rolling out a NZ dollar version of its long-established Global Listed Infrastructure Fund with more ‘exotic’ product launches planned for the local market.
Alister van der Maas, Russell NZ chief, said the while the group’s international listed infrastructure fund already had some local institutional support, the Kiwi-hedged version would open up the product to the local retail market.
As per the Russell style, the global listed infrastructure product gives exposure to a number of underlying managers, namely: US-headquartered Cohen & Steers; Chicago firm Nuveen; Russell’s internal capability; and Australian managers Colonial First State and Maple-Brown Abbott.
The fund, offered in NZ under the trans-Tasman mutual recognition (TTMR) regime, invests in a diversified “portfolio of long-term listed infrastructure securities” via the underlying managers for a total fee of 1.25 per cent.
“In addition to diversification, infrastructure is expected to provide an attractive total return, a relatively high yield and some degree of inflation protection over the long term,” Russell says in a fund document. “…Over the long term, we expect that listed infrastructure will deliver annualised returns marginally lower than those of global equities, with comparably lower volatility.”
According to van der Maas, Russell would look at bringing other global products to the NZ retail market under TTMR as demand required. For example, he said the firm planned to launch a retail-accessible version of the Russell Low Carbon Global Shares fund in NZ later this year. Released in Australia in 2017, the fund targets a portfolio carbon footprint 50 per cent smaller than the underlying MSCI All Countries World Index (es Australia).
Currently, Russell NZ offers a range of bond and equity funds to wholesale investors (as well as bespoke institutional portfolios) as well as five portfolio investment entity products issued by fund host firm, Implemented Investment Solutions.
“Russell has about 400 products globally,” van der Maas said. “We can’t bring them all here so we have to focus on what NZ investors want – and now there’s a real appetite for alternative assets in domestic portfolios.”
He said with the vanilla bond and equities assets classes likely to face “headwinds” over the next few years investors were increasingly looking further afield for returns.
“There’s a demand for unconventional products – we’re certainly getting more questions about, for example, infrastructure, unconstrained bonds and high-yield credit investments,” van der Maas said.
“Of course, the caveat is that risk and return are opposite sides of the same coin.”
Russell NZ hosts its annual investor conference in Auckland on March 28.