16 minute read
Good Returns Fund Manager of the Year Awards 2020
from ASSET 2 - 2021
by ASSET
2020 really put fund managers through their paces, writes Daniel Smith. The Fund Manager of the Year Awards 2020 provided recognition for the hard work that goes on behind the scenes.
BY DANIEL SMITH
Say what you will about 2020, it certainly was a year that had everything. Unstable world politics, market corrections and recorrections; not to mention a global pandemic. But through it all fund managers have been working tirelessly to achieve the best possible returns for their clients.
This is why it has been so important to recognise those fund managers who went above and beyond over the year. Last year, more than any other, special fund managers stood out from the crowd.
The Research IP / Good Returns Fund Manager of the Year Awards are a testament to those in the industry who push the boat out a little further, while bringing in great returns for their clients.
The awards are powered by Research IP and FE fundinfo data. They are based on one-year returns and a number of other factors that ensure the winners and funds shortlisted in each category are not “one-hit wonders”, but take into account the many different qualities required for a successful fund manager to operate.
Research IP managing director Darren Howlin has said that a major theme for 2020 was “resilience of fund managers”.
“When I say resilience I mean that in more than just the perspective of looking at a fund’s returns. Also within the businesses themselves [which] faced a very confronting year in 2020. The market activity has been well documented. But what isn’t often documented is the work that goes on behind the scenes by the fund managers. It is the sustainability and persistence of the fund management operations which allow these funds to continue through the difficulties.”
This belief in the central role of the fund manager in guiding investors through tough times has meant that these awards have a special importance when reflecting on 2020.
The big prize of the night went to ANZ Investments who took out the Fund Manager of the Year award. Since 2016 ANZ Investments have consistently been shortlisted, finalists and winners in several sectors, and richly deserved the win in 2020. In a turbulent year ANZ Investments have again shown strong performance across the sectors, taking away the top award.
Howlin says that though ANZ thoroughly deserved the victory it was an incredibly close race, with many of the shortlisted funds only missing out by a small margin. “What allowed ANZ to push past the other finalists into the top award, was probably their consistency across the year.”
Paul Huxford, chief investment officer at ANZ Investments said, “We are really pleased to have received that external recognition. The Fund Manager of the Year award is a reflection of our entire team. We have a team of 38 investment professionals under one roof looking at many asset classes, so [we’re] thrilled to get some external recognition for all of the hard work the team has done.”
Huxford said that while 2020 had many ups and downs, it also offered lessons for the team at ANZ. “Our focus on quality assets and diversification proved their worth during difficult market conditions. There are plenty of learnings to take from 2020, but essentially we are pleased to see that our investment philosophy has held up under volatile market conditions.”
For the second time running the category of Adviser Choice was a key part of the makeup of the awards. We asked industry members to tell us who they think deserved recognition, because we know that no one knows the strength of the industry like those working in it.
Singled out by many was the work of Fisher Funds KiwiSaver. In a rough year, where many clients were concerned about their savings the team at Fisher Funds stepped up and delivered for their clients.
Senior portfolio manager, Ashley Gardyne, said “It was a real honour to receive the Adviser Choice award and be recognised by the advice community for our investing capabilities in 2020. These awards are always extremely competitive. I’m really pleased that our approach to investing and the depth of our investment team contributed strongly to our performance in what was a challenging year in financial markets.”
Another important adviser choice category is the KiwiSaver, this year taken out by Booster. With KiwiSaver the main way in which many New Zealanders engage with an investment fund, and the pot of money contained in KiwiSaver growing bigger and bigger, it clearly is one of the key elements of the make-up of this country’s financial sector.
Ashley Gardyne
Clear customer engagement in a tumultuous period allowed Booster to take out the top spot. Howlin said that, “Booster was a surprise in this category. This was the first time that Booster has popped through as a clear contender for the top spot. It has been shortlisted a few times over the last six or seven years, it has been a finalist once or twice. Though it is a multifaceted funds management business it is not very often we see Booster come through. It was a pleasant surprise to see something different coming through and taking out the top spot.”
Another new category that we were pleased to have in place was that of Responsible Investment. With more and more funds tacking on buzzwords such as “green” and “carbon neutral” it was important for this event to recognise those fund managers who went beyond the phraseology and actually utilised sustainable investing to make an impact in their clients’ lives.
The Responsible Investment category was taken out by Pathfinder, in recognition of their hard work in the responsible investment sector and the way that its fund had navigated the rough waters of 2020 while maintaining its ethical standards of investment.
John Berry, CEO and co-founder of Pathfinder said “The award is fantastic recognition for our team's work over a number of years. We're committed to embedding our ethical framework into the way we invest, without compromising on returns. We genuinely believe that our investment choices have 'real-world' outcomes as well as financial outcomes. It's absolutely possible to invest for great financial returns and at the same time benefit our planet and communities.”
Howlin said that Research IP took into account a wide range of factors when deciding this award, stating that “While many factors are captured in our qualitative research, it was important to recognise the achievements of New Zealand fund managers, who are at the cutting edge of responsible investing.”
What surprised many was the success of Smartshares’ NZ Top 10 in taking out the New Zealand Equities Fund of the Year. This continues the theme of ETFs consistently outperforming other funds on the equities stage. And the success of Smartshares can provide lessons for other fund managers in portfolio allocation.
Howlin said “There are people who have views that passive investing is not real investing. It is amazing that the Smartshares index based offering, at least in equities, continues to prove those people wrong. These funds continue to show that index investing is a real option.”
QuayStreet Asset Management emerged as winners in two categories, Boutique Fund Manager of the Year and Diversified Fund of the Year. Andrew South, investment manager, Australasian equities at QuayStreet said that both of these awards are recognition of the hard work that the team have been putting in over the years.
“While it is always great to be recognised in industry awards, this is really about our team. We have a small team with a lot of experience in the industry and a diverse range of skills who all contribute to the success of our various funds.”
“We were happy to see our diversified NZ equities portfolio recognised as this has been at the top of the pile for some time. QuayStreet has seen five years of solid growth over the diverse range of products that we offer. We look forward to continuing this into the coming years.” All of those who were shortlisted in these awards made great efforts during the ups and downs of 2020 to provide excellent management of their clients’ funds. The role of a fund manager is not to solely provide returns for its clients when the market is up, but to manage risks and controls through the peaks and troughs of the exchanges.
John Berry
If nothing else 2020 gave a rigorous challenge to the financial services industry. Many found themselves in the position of being essential service providers, working while the country locked down. The winners of these awards are the best of an entire industry that has worked tirelessly through a hell of a year to provide the best outcomes to their clients. A
ANZ Investments wins Good Returns New Zealand Fund Manager of the Year award
ANZ Investments is delighted to have taken out the 2020 Good Returns Fund Manager of theYear award.
The award is a tremendous honour to both the Investment Management team and the wider ANZ Wealth and Private Bank business and underlines the strength of ANZ’s core investment philosophies.
In what was a challenging year for investing, the recognition highlights the importance of ANZ’s key investing principles that remain true throughout all market cycles.
“We believe our fundamental approach to active management, which allows us to monitor both domestic and international markets, allowed us to navigate the ups and downs of 2020. Furthermore, this approach ensures we are invested in quality companies with strong governance and responsible investing principles,” said Craig Mulholland Managing Director Wealth and Private Bank.
This investment process has seen ANZ deliver strong returns over the long term to its customers, which include more than 700,000 KiwiSaver members whilst also offering a committed, consistent and sound proposition for the advisory community.
“We would like to thank our customers for trusting ANZ to achieve their long-term financial goals,” said Mulholland.
Good Returns said the award is based on one-year returns and included several other factors to ensure winners were not “one-hit wonders” – further validation of ANZ’s long-term performance. A
The KiwiSaver Advisers’ Choice award goes to ... Booster
A dedicated team that take special care of their clients and advisers has taken home the Advisers’ Choice category for KiwiSaver in the Good Returns Fund Manager of the Year Awards for 2020.
Financial advisers voted Booster Investment Management top KiwiSaver provider at the awards.
Booster head of growth David Copson said the team were “extremely proud” as it was “like winning the award for the players’ player of the year”.
“We have a dedicated team that takes special care to get to know advisers and what their clients want,” Copson said.
“A big part of what we do is understand what makes their business tick.”
He said being honoured by hardworking financial advisers who know their products made it even more satisfying.
“But it's not all about the product and we emphasise that to our advisers.
“Having different products for different advisers gives them the ability to have an in-depth conversation with their client and fit that product to their needs.”
Copson said with investors becoming more engaged with their KiwiSaver funds, Booster had to evolve with their needs, and with the needs of their advisers.
He said with the focus on where KiwiSaver funds were invested becoming more important Booster was very serious about being able to provide more socially responsible options.
“There's a lot of noise out there but we make sure our clients understand what makes up a truly socially responsible fund.”
Having all of its KiwiSaver funds signed off by the RIAA gave Booster clients and advisers extra confidence, Copson said.
“We take this seriously and are driven by our clients’ needs and listening to our advisers.
“Our motto moving forward is ‘how Kiwis make sense of money’, so whatever the future holds for us it will be about moving towards that goal.”
Copson said with innovative products and services Booster can have more in-depth conversations with clients and more personalised outcomes.
“We have set very high service standards and our clients appreciate that engagement.” A
Oldest & best: Smartshares NZ Top 10 ETF
Smartshares CEO Hugh Stevens talks about its award-winning fund and the logic behind the increasing popularity of ETFs.
Smartshares was the first New Zealand issuer of exchange traded funds (ETFs) and our Smartshares NZ Top 10 ETF picked up the New Zealand equities fund of the year in the 2020 Good Returns Fund Manager of the Year Awards. Smartshares CEO Hugh Stevens talks about the award-winning fund and the logic behind the increasing popularity of ETFs.
What’s the history of the Smartshares NZ Top 10 ETF and why is it attractive to investors?
It’s an oldie but a goodie. The Smartshares NZ Top 10 ETF (TNZ) was launched in June 1996, making it one of the oldest ETFs in the world. TNZ is designed to give investors access to the top 10 NZ-listed companies by market capitalisation in one simple trade. The fund tracks the S&P/ NZX 10 Index. Given the concentrated nature of the NZ share market, the top 10 stocks represent 60% of the total market value – so it’s a fantastic building block.
Why would you choose this fund instead of investing in the 10 stocks directly?
Since the Smartshares NZ Top 10 ETF includes all 10 of the largest NZ-listed companies, it’s often a more cost effective and simple way to invest in NZ's largest companies than buying the individual shares.
If an investor was to buy the 10 individual shares, the commission cost could be in the region of $300 (as most brokers charge a minimum commission of $30 per share). By contrast, an investment in Smartshares NZ Top 10 ETF gives access to all the top 10 shares in a single share purchase.
How do financial advisers get access to this fund?
Financial advisers can access the fund either through their administration platform, through a broker, or through Smartshares directly. In addition, the Smartshares NZ Top 10 ETF is available (via SuperLife Invest, a managed investment scheme managed by Smartshares) as an unlisted multi-rate portfolio investment entity (PIE). Advisers wanting to gain access to this fund, or any of the Smartshares funds should get in touch with us to discuss their needs.
Why would financial advisers use the Smartshares NZ Top 10 ETF?
The Smartshares NZ Top 10 ETF is an ideal asset allocation tool for financial advisers. It enables advisers to give their clients access to NZ's largest companies in a single trade. You can tilt portfolios towards NZ large-cap stocks simply by adding the fund to client portfolios. Subsequently, you can adjust the weighting in large-cap stocks by simply adding to or reducing the holding in the fund.
Advisers also often use the Smartshares NZ Top 10 ETF in portfolios for liquidity purposes. The fund can be quickly bought and sold on-market, and can therefore be used to provide immediate liquidity without having to sell less-liquid or longer-term portfolio holdings.
The Smartshares NZ Top 10 ETF can also be used in conjunction with other Smartshares ETFs as asset allocation tools. ETFs enable rapid switching between asset classes. For example, if an adviser wanted to move client portfolios out of equities into bonds, this can be achieved by selling the Smartshares NZ Top 10 ETF and buying the Smartshares NZ Bond ETF (NZB) at the same time. The change in market exposure is immediate. Settlement is T+2, so proceeds from the Smartshares NZ Top 10 ETF’s sale would be available to settle the purchase of the Smartshares NZ Bond ETF and investors are not out of the market during the switch.
What other trends is Smartshares seeing around ETFs?
As the market leader in ETFs, it’s been encouraging to see some institutional investors starting to move into passive investment products through the Smartshares ETFs and its unlisted passive products – mirroring global trends. A range of leading NZ wholesale and adviser platforms now utilise Smartshares, enabling financial advisers to access our unlisted passive funds for the first time.
This is contributing to strong growth in the adoption of ETFs. In the past year, direct ETFs under our management increased 52% to $2 billion, while our total Funds Under Management (FUM) now exceed $5.3 billion. This scale has enabled us to launch the new Core Series ETFs with very low fees, as well as a comprehensive range of options as building blocks for investors.
Smartshares now manages close to $400 million for institutional investors both in NZ and in the Pacific Islands, and our institutional pipeline is strong for 2021. A
The Smartshares Exchange Traded Funds are issued by Smartshares Limited. The Product Disclosure Statements are available at www.smartshares.co.nz
At Fisher Funds we approach investment in a relatively unique way and believe this will lead to better long-term outcomes for our clients
A bit of history and why our investment process is so important
The first fund offered by Fisher Funds, our New Zealand Growth Fund, has delivered an annual return of over 12% per annum after fees over the last 22 years. Clients that have been invested since the beginning would have seen a $10,000 investment grow to almost $150,000 in March 2021 (after fees and before tax). Compare this to less than $93,000 if it had been invested passively in an index replicating the NZX 50 Index.
While 22 years is a long time in financial markets, the pillars of our investment approach haven’t changed.
Our active approach to investment
At the core of our investment approach is a belief that active management can beat the market. Because markets are not always efficient and many investors underappreciate the potential for certain businesses to create significant shareholder value over the long-term. It is not uncommon for a large proportion of share market gains to be driven by a small group of companies.
In New Zealand a handful of phenomenal local businesses like Ryman Healthcare and Mainfreight contributed significantly to the outperformance of our NZ Growth Fund over the last 21 years. Our smart active approach to investing is designed to try and identify high quality compounders like these and hold onto them for the long term.
Our investment philosophy
Our research is focused on trying to identify companies that have three key attributes common to many value creating businesses; wide economic moats, talented management teams and underappreciated earnings growth. The importance of these have been continually reinforced by lessons our team has learned over the last two decades.
We believe that focussing on this and actively managing our funds in-house with one of the largest investment teams, will allow us to deliver better results for clients in the years ahead. As it has over Fisher Funds’ 22 year history.
