ANZ has revamped its investment philosophy with a new emphasis on ‘flexibility’ over active management while establishing a stand-alone emerging markets equity allocation.
In a revised KiwiSaver statement of investment policy and objectives (SIPO) published last week, the country’s largest retail fund manager dropped an explicit reference to an active management style preference.
“There are many ways to outperform markets,” the restated ANZ SIPO says. “We choose the markets we invest in, and how we invest. Our approach, including our investment style, needs to be flexible if conditions change.”
Under previous wording, the ANZ KiwiSaver SIPOs – covering its main, default (now closed to new members) and adviser-focused OneAnswer schemes – noted that “active management can add value both at the asset allocation and investment selection levels”.
George Crosby, who officially joined ANZ as chief investment officer from the NZ Superannuation Fund early last year, said the philosophical rewrite provides more clarity on the “beliefs which guide our investment decisions, in such a way that our stakeholders can understand what we are doing and why”.
“Our beliefs determine the investment objectives we aim for, the risks we take to deliver them, whether we should work with external partners – including external managers – and what capabilities we need,” Crosby said. “The refreshed beliefs mean we actively choose how to implement our investments – we can choose active, systematic or passive strategies – but this is about flexibility. We remain active investors.”
ANZ formally hired BlackRock last year to provide a range of fund services including hedging, rebalancing, cashflow management, monitoring and analysis as well as “access to global investment expertise and insights”, according to scheme documents.
BlackRock also picked up a roughly $4.6 billion underlying mandate after ANZ dropped MFS from its global equities manager panel.
Among other changes, ANZ has also carved out a specific emerging markets share allocation from the previous broader international equities strategy.
“This allows us to be more flexible in allocating between developed and emerging markets,” Crosby said. “While the emerging markets exposure is currently gained through a derivative, we are looking to use specialist external managers. No decisions have been made yet about the appointment of those managers.”
The ANZ investment rethink comes amid a performance slump at the approximately $35 billion manager, headed by Fiona Mackenzie, that has seen it fall to the bottom among diversified fund cohorts in recent sector surveys carried out by Melville Jessup Weaver and Morningstar.
Crosby said ANZ had “started making meaningful changes to portfolios to enhance their resilience to market conditions and deliver good outcomes to our investors over the long term” on the back of its BlackRock relationship and new internal resources.