ASSET 2 - 2021

Meet Fidelity Life's new CEO Melissa Cantell.

From teen insurance salesman to MDRT Bonds are broken

ASSET 02 | 2021 | WWW.GOODRETURNS.CO.NZ

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UP FRONT | EDITORIAL

Industry changes, lost allies and FMOY celebrations

M

arch 15 came and went, and the sky didn’t fall on our heads. Welcome to the new world.

At this stage it does not feel like too much change but without a doubt some will be coming down the pipeline sooner or later.

While Covid-19 gets many curses it was arguably a godsend for the advice industry. Due to the pandemic the start date was pushed back a year.

Even with an extra 12 months some firms were not fully ready and some haven’t landed on their final plans yet.

Added to that many service providers say they were incredibly busy in the final few months as some advisers had left things to the last minute.

CONTENTS | ASSET 2

One of the biggest concerns is the number of people who have decided not to carry on as financial advisers. There is no hard data, but anecdotally many have removed their shingle from over the door.

Most of these people are advisers who have been at the coalface for decades.

There is a significant amount of experience leaving the advice world and that is a worry. But then, too, a new breed takes over. How will they change things?

Or will the world be one where they don’t lead the change but rather have it forced on them by regulators and product manufacturers?

An ally lost Speaking of regulators it was somewhat of a surprise to learn about the resignation of Financial Markets Authority chief executive Rob Everett.

Some people seem happy to see him go, however I think it will be a loss.

Who gets appointed to this new role is important as they will shape how the new advice regime evolves.

Everett is quite different to his gunslinging predecessor Sean Hughes.

Everett believes in financial advice and that was one of the things he made clear to the board when he applied for the role.

Hopefully the FMA’s third CEO will

GOOD RETURNS FUND MANAGER OF THE YEAR AWARDS 2020 FMOY 2020 recognised the industry’s star performers for a job well done – in spite of the year that was.

UP FRONT 04

EDITORIAL

05

OPINION SBS Graham Duston with postpandemic learnings from the Black Death.

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Celebrating winners In this issue of ASSET we are celebrating winners in the Good Returns Fund Manager of the Year awards. While the gongs were handed out virtually at the end of last year we chose to do this piece once we had got through the normal endof-year madness.

The awards are important as they celebrate excellence and the best in the business.

Hopefully this year, Covid-19 willing, we will expand the awards event into something bigger. I won’t give away too much here, but we do have some exciting plans.

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NEWS FADC keeps adviser's name secret; FMA names a KiwiSaver adviser.

24

ADVISER PROFILE Brian Burgess: journey from teen insurance salesman to MDRT.

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PEOPLE New director of supervision for FMA; Fidelity shuffles top deck; and more.

28

DATA Mercer’s annual asset class ‘periodic table’ with 2020’s winners and losers.

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We will have more on Everett’s departure closer to the time, but I do think advisers are losing an important ally.

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PROFILE ASSET talks ‘transformation’ with new Fidelity Life CEO Melissa Cantell.

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INVESTMENT COMMENTARY David van Schaardenburg: shifting away from bonds.

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UP FRONT | OPINION

‘‘

Covid-19, KiwiSaver and – just for good measure – the Black Death

Are you surprised by what has happened?”

The question feels familiar.

That’s because we’ve seen American political journalists putting it to pundits and commentators constantly over the last few tumultuous years of politics in that country. The answer has almost always been the same: “Shocked, but not surprised.”

That response also sums up how I’ve felt since the onset of the Covid-19 pandemic. The strangeness, disruption and menace to public health that characterise this particular tumult have indeed made it shocking. What is not surprising is the fact that catastrophe in the broad sense has struck.

I’ve been in this business a while. My name often now appears with the words “industry veteran” attached, just to remind me. If I’ve learned anything over the past several decades, it’s that tumult in some form lurks around every second corner. Since 1990 we’ve experienced wars, emerging market crashes, bond market collapses, technology busts, terrorist attacks and the big daddy of them all, the GFC. It’s how the world rolls. And when the world rolls, so do markets. Tumults like these leads to market volatility in the same way the movement of tectonic plates leads to shaking buildings.

The decade that followed the GFC in 2008 was actually relatively calm.

Financial markets enjoyed a good run. As that run stretched out, I became a little nervous. Experience told me we were overdue for a correction.

Lo … the pandemic arrived, turned the world upside down, and Covid-19 is still with us. It has put our industry to the test, big time. I have to say the pass rate

BY GRAHAM DUSTON

has not been as high as it should have been. I’ve been perturbed by some things that have occurred in the industry during this crisis.

One of these was the migration of so many KiwiSaver members from Balanced and Growth Funds to Cash and Conservative Funds. In all, 250,000 KiwiSaver members made the switch early in the pandemic, during March and April 2020. This was a panic move, pure and simple, and the consequences were dire for these investors. They ended up well behind where they should have been had they not switched, their losses having crystallised as the markets made their resurgence.

This put the spotlight squarely on the importance of sound investment advice at a critical time. We’ve seen plenty of evidence of that here at FANZ. Our experienced team of advisers rolled up their sleeves and did a power of work when the markets took their initial tumble. They communicated, contextualised, reassured and yes, advised. As a result, we experienced a client switching level in March and April 2020 that was 10% of the industry as a whole (based on our Registry provider’s statistics) and our clients came through 2020 in pretty good shape. The lesson here: good, rational counsel is a necessary counterweight to the impulse to make rash decisions. And it will result in better customer outcomes.

Now if I may, let us consider the Black Death. The topic is not unrelated.

Europe’s 14th century Black Death was also a pandemic of course. It is what happened after that plague that fascinates me.

My source for this is a treatise written in 2016 by Kiwi historian Professor

James Belich, now a distinguished academic at the University of Oxford. In Belich’s view, pandemics differed from droughts, fires, wars and earthquakes in that infrastructure remained intact after a pandemic. You did not have to eat your breeding stock in order to survive (!) As a result, economic recovery was quicker but also very different.

The Black Death wiped out half the population and in doing so doubled the GDP per capita of everything. The remaining population was healthier, the feudal system broke down and new methods and technologies emerged, most driven by a labour saving imperative. For example, a cargo ship that could tack into the wind was invented because you no longer had 200 sailors available to row the ship into harbour in a head wind. Improvements to weapons and armour also emerged, necessitated by depleted numbers of soldiers. The capacity and power of many European countries to go out and colonise the world was largely derived from the technological revolution that followed the Black Death.

My feeling is that we may well look back and see roughly similar trends in the post Covid-19 world. New technologies and work practices have already emerged or have made more rapid progress as a result of the crisis. Some countries will be able to use the momentum gained from having had a relatively “good” pandemic to enhance their position in the world. The changes wrought by the virus will challenge every nation’s powers of adaptability. Some will do better than others.

It’s an example of “hindsight being the best insight into foresight”. A WWW.GOODRETURNS.CO.NZ | 05

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UP FRONT | NEWS

New regulations will improve advice The chairman of the code working group, Angus Dale-Jones, said the adviser regulation changes, which started on March 15, would create widespread improvement throughout the industry.

“The whole philosophy of this change in legislation is to lift the game of advisers.

“When MBIE began working through this process they wanted to lift the game in two ways, and that has been central to all of the regulation changes.

Dale-Jones said the government was looking to improve both the availability and quality of financial advice.

“In everything that we have done in building the code we have focused on those two words, availability and quality.

“In order to achieve those objectives

the legislation removed barriers that had previously existed, and it created in its place one blanket legislation for all different types of advice.

For Dale-Jones that balancing act has been maintained with three things the adviser needs to consider moving into the new regime.

“The first is competence. Everyone who enters the new regime will have gotten through those competence hurdles. But really where I want advisers to focus on in terms of competence is their continued professional development,” he said.

“The second point is for advisers to look at the standards that are about getting your overall ethical standards and conduct arrangements for your business

as a whole working well. It’s not so much thinking about each individual client, but thinking about clients as a whole.

“The third point for advisers [is] the client care standards. These are getting the adviser to consider what they should do in every interaction with clients. The big reminder to people is to explain to your client what you are doing and what you are not doing.”

Dale-Jones believes the code contains a built in flexibility that allows advisers to get on board with relative ease and points to future strength across the advice industry.

Anyone applying for a Financial Provider License must now apply for a full licence as the transitional period has ended.

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UP FRONT | NEWS

FADC keeps adviser’s identity secret – against her wishes The Financial Advisers Disciplinary Committee has decided not to release the name of an adviser who was recently censured for three instances of poor record keeping.

The committee, made up of chairman Sir Bruce Robertson, Tracey Berry and Sarah-Jane Weir, met in January this year and concluded the adviser had breached Code Standards 12 and 15 under the Code of Professional Conduct for Authorised Financial Advisers.

In its decision, released on March 4, the Committee found the Respondent (adviser) had failed In the case of three clients to record in writing adequate information about a personalised service provided to a retail client and to demonstrate adequate knowledge of the relevant legislative obligations which result from the term “personalised service”.

The committee also concluded that the adviser did not need to be named as they had indicated they would no longer be operating as a financial adviser in future and “…the Committee notes that the Respondent’s breaches of the Code are less serious than those breaches found in other cases before the Committee”.

“There is no suggestion that the

Respondent has improperly benefited at the expense of her clients, or that any client has been disadvantaged,” the committee stated in its decision.

“There are no previous findings of misconduct against the Respondent.

“However, the breaches are not to be treated lightly. Record keeping is a fundamental duty of an adviser that underpins the supervisory regime established by the Act and its importance cannot be minimised.

“It’s therefore important to sanction breaches where there are multiple instances of poor record keeping. There is a need to reinforce professional standards and ensure the profession remains conscious of the significance of proper records.

The breaches of Code Standards 12 and 15 come down to a misunderstanding of personalised service, and the obligations providing a personalised service engages (including record keeping).

The committee went on to say that personalised service is a core concept in the Act, “…it is a gateway to many of the Act’s disclosure obligations (which, in turn, are central to the Act’s scheme for informing and protecting the public).

“A fundamental failure to understand

what it means (and therefore when the ensuing obligations are triggered) means some disciplinary action is warranted.

“The Committee notes that the Respondent has indicated that she intends to leave the industry and has confirmed to the FMA that she will take the necessary administrative steps to wind up her financial advice practice by no later than 31 March 2021.”

Ongoing supervision was not required in this case and the adviser was censured for breaches of the code. No costs were sought by the committee and a permanent name suppression order was put in place.

“Having considered the competing factors, including the important principle of open justice, we note that the publication of the details of the Committee’s decision provides market participants with both visible deterrence of code breaches and clear education on the nature, extent and seriousness of their obligations to keep proper records.

“Publication of the Respondent’s identity would not further these objectives. As the Respondent intends to the leave the profession, providing sufficient protective mechanism for the public or future clients is not a factor,” the committee said.

But FMA names adviser Earlier this month, the Financial Markets Authority (FMA) issued a warning to a financial adviser regarding KiwiSaver advice he gave clients during Covid-19 market volatility.

Roger Gannon, an Authorised Financial Adviser at Gannon Insurance Brokers, sent a bulk email to his clients in March 2020. He recommended they immediately move their KiwiSaver savings plans and similar investment funds to “low risk” funds in the wake of market uncertainty caused by Covid-19.

The FMA received a complaint from one of Gannon’s clients and in May 2020 the regulator issued a formal warning to Gannon and the industry of its expectations around suitable advice for market conditions. Gannon was not named at this point.

The FMA made further inquiries into Gannon and discovered other concerns

08 | ASSET 02 | 2021

with his advice process and determined that a public warning was appropriate in the circumstances, recognising that Gannon cooperated fully with the FMA throughout its inquiries.

Following its investigation, the FMA decided that Gannon contravened the Financial Advisers Act 2008, in particular, Section 22 - by failing to meet disclosure requirements and Section 33 - by failing to exercise care, diligence, and skill that a reasonable financial adviser would exercise in similar circumstances.

There are no civil penalties associated with contraventions to sections 22 and 33 of the Act and the FMA determined the public warning was sufficient to enforce compliance and hold the adviser to account for the breaches of the Act. James Greig, FMA director of

supervision, said Gannon’s advice was “…a knee-jerk reaction to market volatility at the time and failed to meet the standards expected for supporting his clients.”

Gannon told Good Returns that he believes a fair outcome has been reached.

“Not only is it fair but it has been good for both me and the business.

I have taken a lot of steps to ensure that I am compliant now. All the recommendations and advice that I give now are top-notch.”

In issuing its warning, the FMA took into account that Gannon has engaged an independent consultant to assist with carrying out a professional development plan, compliance training and a review of past advice and supplementing it where appropriate. All of which serve to mitigate the risk of potential future harm.

Manager takes a bet on cryptocurrency NZ Funds has part of its KiwiSaver fund invested in cryptocurrency, and says that advisers should remain curious about the oft-maligned asset class.

In a volatile market, fund managers should remain interested in different kinds of asset classes, James Grigor, chief investment officer at NZ Funds tells Good Returns.

For Grigor and the team behind the KiwiSaver portfolio at NZ Funds that means allocating money into cryptocurrency.

He says “The way that we think about managing money for our clients, the building blocks of our portfolios are always going to be shares and bonds.

But we do think that you need to take a step back and think, ‘Where are the opportunities in the investment

landscape to generate returns over and above that?’.”

Grigor compares bitcoin to investing in gold. “[With] all of the hallmarks and the case for investing in gold, you should absolutely be investing in bitcoin. The investment philosophy and reasoning is very similar, around store of value and protecting from government inflation.”

The allocation of cryptocurrency, or bitcoin, in the NZ Funds KiwiSaver portfolio has raised industry eyebrows.

But Grigor says that the critics don’t understand the details of what is at play.

“To those people that are naysayers about cryptocurrencies or other investments that are not your vanilla stocks and bonds, take some time to step back and be curious.

“Put some capacity into researching these things because it all helps to generate wealth for people’s retirements.”

For advisers whose clients are asking them about cryptocurrency investment Grigor has some advice.

“Advisers need to be sceptical about all asset classes. Not just alternative assets. But I would say that you have to continually challenge yourself to be curious and to be innovative.

“I would encourage advisers to stay curious, keep asking questions, challenge their investment management.

“Challenge NZ Funds for having bitcoin, but challenge other investment managers for why they don’t. Because I believe that many of the ones who don't, don’t understand enough about the asset class and have assumed that it is not right for them.” A

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WWW.GOODRETURNS.CO.NZ | 09

UP FRONT | PEOPLE

FMA appoints director of supervision

As the new financial advice regime begins the FMA has shifted its focus from transitional licences to monitoring the market, with advisers moving towards full licences.

Leading this change is James Greig,

Fidelity shuffles top deck Fidelity Life’s current chief distribution officer Adrian Riminton will, next week, move into his new role while

new director of supervision. Greig has recently been appointed to the FMA’s executive committee and has reported directly to chief executive Rob Everett since 2020.

Greig has led the FMA’s supervision team since 2016. The team is responsible for monitoring and supervision of managed investment schemes (MIS), supervisors, custodians, derivatives issuers and financial advice.

Michael Hewes has been appointed head of financial advice, within the supervision team and will lead this

work, reporting directly to Greig.

Everett said: “James is already making a great contribution to the FMA’s leadership as we ready ourselves for a significant expansion in our remit. In particular, we are now implementing the new regime for financial advice which came into force earlier this week.

“James has proven himself an effective leader and played a major role both in our response to the Covid-19 pandemic and in the culture and conduct reviews into banking and life insurance in 2018.”

remaining on the company’s executive team reporting to chief executive officer Melissa Cantell.

Cantell says Riminton expressed an interest in the role last year and was appointed following an extensive recruitment process which included external candidates.

“We see risk management as a business-critical function and a strategic enabler for our customerled transformation,” Cantell says.

“With plenty more regulatory and other changes expected in the years ahead, Adrian’s broad commercial background – including last year’s stint as our acting chief executive officer – means he’s ideally placed to help lead our business through our transformation.”

Trecia Brown, Fidelity Life’s head of

professional development, will act as chief distribution officer while a recruitment process is conducted.

Meanwhile, Fidelity Life’s previous chief risk officer, Anna Black, remains on the executive team as transformation lead for people, process and customer, a role she’s held since July last year.

Black is playing a pivotal role on Project Watson, the technology project underpinning the company’s broader transformation.

“These are truly exciting times for Fidelity life as we continue to make great progress with our customer-led transformation,” Cantell says.

“We’re focussed on delivering sustainable, profitable growth so we can build confidence and trust and continue protecting New Zealanders’ way of life.”

Are you looking to sell a book of Insurance or Kiwisaver Business?

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10 | ASSET 02 | 2021

Hunter Investment Management has positioned itself for future growth and plans to expand into several different asset classes with the appointment of Anthony Sowerby who will join the company in a client services role.

Sowerby previously worked with IIS in launching the InvestNow KiwiSaver scheme last October. Prior to IIS, Sowerby worked as COO at Salt Funds Management after a long stretch at AMP Capital NZ. Hunter topped $1 billion in assets under management this year and its managing director Tony Hildyard said its growth is not going to stop there

Hunting growth at HIM

Hawke’s Bay to begin a career as a financial adviser and has taken up a position with national insurance advisory and financial services group Plus4 Insurance Solutions.

MacDonald has seven years’ experience in the financial services sector and is a Hawke’s Bay local where he was a foundation student, head boy, and captain of the 1st XI cricket team at Flaxmere College.

He began his financial services career with a well-known Hawke’s Bay financial planning practice in 2014 and in 2018 he joined Gary Hemmings and established Common Sense Financial Planning.

As a financial adviser and an Accredited Investment Fiduciary, MacDonald provides financial advice including KiwiSaver,

From RNZ Navy to financial advice Former Navy recruit Brad MacDonald moved back to the

with the company’s goal to become a broader fund manager.

Hunter recently launched two new diversified funds – diversified balance and diversified growth.

Hildyard said the company was fortunate to employ Sowerby who already has some familiarity with what Hunter does through his time at InvestNow. “He’s got a great skill set, good contacts, and great experience in New Zealand markets. It positions Hunter for growth while making sure that our clients continue to get good service,” Hildyard said.

investment and retirement planning, and personal insurance. He works with a diverse range of clients including business owners, families, farmers and medical professionals in New Zealand, Australia, Singapore and Japan.

Plus4’s group general manager Peter Standish says MacDonald is an experienced and highly regarded financial services professional who has established a successful practice in the Hawke’s Bay. Established in Nelson in 2008, Plus4 now has 46 advisers working from 16 locations between Whangarei and Invercargill predominantly working with small to medium-sized enterprises, their owners, and their accountants. A

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FEATURES | PROFILE

It’s all about transformation Six weeks into her role as chief executive of Fidelity Life Melissa Cantell sat down with ASSET to tell us about her goals.

12 | ASSET 02 | 2021

W

e have another woman leading a life insurance company in New Zealand, this time it is 43-yearold Melissa Cantell. She took up reins at Fidelity Life after Nadine Tereora unexpectedly quit the role.

Cantell has ascended into the role as the company is mid-flight through a fiveyear transformation programme.

A week after sitting down with ASSET Cantell’s newly-inherited team rolled out Fidelity Life’s new commission structure.

This is a big deal for advisers and for the company.

Like Partners Life, Fidelity is using a score sheet to set commission levels. The three factors in its matrix are persistency (60%), in-force policy count (30%) and conversion rate (10%).

Advisers are scored in five bands across these three metrics.

A weighted score is then calculated and this corresponds to four commission bands. The lowest commission is 150% and the highest 240%, with intermediate bands of 180% and 210%.

Cantell said she was happy with the model and has not changed anything.

“It’s got my full backing,” she says.

The new approach is about transparency and making things sustainable for the company, she adds.

“We are trying to take an approach that does look and feel a bit different.”

Eyebrows up Cantell's appointment raised a few eyebrows across the industry as her most recent role was with general insurer IAG, rather than life insurance. At IAG she was chief operating officer and she took on the role of Covid response director.

She spent nearly six years at IAG and before that had stints at Coca-Cola Amatil as general manager coffee and alcohol, as well as six years with Fonterra as general manager specialty cheese and head of legal.

Yes, she is a trained lawyer – completing her degree at Auckland University and then doing a stint at Bell Gully.

But if you have any doubts about her passion for insurance, you shouldn’t.

“I joined the industry by accident and I stayed on purpose,” she says, going on to say that “it’s the most meaningful industry I have worked in.

“My passion for this industry is incredibly genuine.”

Cantell sheets her passion back to when she took over the running of a claims team and went on the frontline listening to calls from customers.

“I spent time on the ground with [the claims team],” she says. “I was just suddenly struck how important

[insurance] was. I had never thought about it from that point of view.”

It sounds a tad clichéd (even though she doesn’t do clichés) when she says: “What gets me out of bed in the morning …?

“Genuinely helping people.”

Genuine comes across as one of her characteristics. Cantell is not likely to be one of these life insurance company CEOs who are tied to their desk.

When asked what sort of CEO she aspires to be Cantell says there are two choices.

“The one who’s sitting in the back office with the door closed with my nose in my internal business, or the one who is out talking to advisers and our partners keeping conversation alive and trying to solve things together – my aspiration is to be the latter.

“My job to do now is to live up to that.”

While she hasn’t spent a lot of time with advisers yet (thanks to Covid-19 and Auckland’s lockdown) she promises that she will be out there soon.

“What you see is what you get” is one of those phrases Cantell likes to use. And, by her own admission, she likes to talk.

While IAG used brokers and Cantell has some experience with third party distribution she recognises there is more to learn.

‘We are trying to take an approach that does look and feel a bit different’ She describes life insurance as the “next iteration” of her learning about this channel.

The good news for advisers is that she is “a great believer” in the adviser channel. And so are the company’s customers. From research it is “clear our customers see value in their adviser”.

But that doesn’t mean Fidelity won’t look at other channels in the future.

“Yeah, quite possibly,” she says when asked about other channels.

“I say that open-endedly and wouldn’t rule it out.”

But she does point out no one has yet worked out how to do a pure direct play with life insurance “and it shows me that is not the answer”.

Our conversation is littered with phrases like “customer-led”.

Transformers Cantell takes the helm at Fidelity Life as it embarks on a journey of transformation – and that is one thing she is big on.

From her LinkedIn profile: “I have a particular interest in business

‘I joined the industry by accident and I stayed on purpose’ transformations and enjoy the challenge of developing and delivering comprehensive growth or turnaround plans.”

The first stages of the change are nearly finished. One was around brand and the second is technology.

The company is soon to roll out Project Watson (named after company founders Gordon and Shirley Watson).

She says all transformation projects have technology as their cornerstone.

When the company launches its Adviser Portal, advisers will see changes which give them more time to spend with their customers.

What comes next is Cantell’s mission.

She says the end goal is clear – to reimagine life insurance for New Zealanders, but the path to the goal is something different.

“There are many, many choices we can make,” she says. “The challenge for me is to make the right choices at the right time.

“We are not short of ideas.”

Currently the company is doing some customer research on new products and potential service improvements through Qualtrics.

The research is intended to understand what is working and what isn’t.

This all fits back to Cantell’s talk of making changes which are customer-led.

As a young and modern CEO she talks about using data and analytics to make changes. Indeed she believes insurance companies have massive amounts of data but have not traditionally been good at using it.

With Cantell leading Fidelity Life you can expect to see changes.

“I’m not afraid to change things – it adds to our aspiration of helping customers.”

Coming from general insurance and FMCG (fast moving consumer goods) she says “I am not a lifer in life [insurance].”

She brings a “fresh set of eyes” and says she “naturally look[s] at things differently”.

“Anything is possible if you put your mind to it.

“What I love is transformational change.

“I suspect you will hear lots of sound bites and lots of things people should be saying but that is not how I operate.

“With me what you see is what you get.” A WWW.GOODRETURNS.CO.NZ | 13

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Investing in real estate: beyond residential and retail With real estate’s Covid-related challenges in the news lately, Shannon Murphy sat with Shane Solly, Portfolio Manager of the Harbour Real Estate Investment Fund, to discuss where he sees opportunities in a sector with increasing dispersion of returns.

BY SHANNON MURPHY AND SHANE SOLLY

Murphy: When we’re talking about investing in real estate, many of us think mostly of offices and retail. What sorts of real estate do you look at?

Solly: Offices and retail are a part of the sector, but there are many other types of real estate which can add diversification to a portfolio. For example, industrial real estate is an increasingly disrupted space. Manufacturing, distribution centres, transport logistics, data centres (for example Amazon Web Services) and cold storage are all benefiting from automation and business change. They also tend to have longer lease terms, 14 | ASSET 02 | 2021

between four and 20 years, and therefore lower volatility in cashflows.

Examples of the types of real estate Harbour invests in include childcare centres, land lease communities, healthcare and industrial logistics (dark stores and grey stores).

Murphy: What are dark and grey stores?

Solly: With the rapid increase in online sales and home deliveries, businesses have had to rapidly adapt their distribution channels, to deliver great outcomes for consumers and keep costs low for retailers.

When people buy their groceries online, sometimes their groceries come from their local supermarket, but they may come from a dark store or a grey store. Dark stores are industrial warehouses dedicated to rapid dispatching of online orders – they are not open to the public, they feature high product racking and often robotics and automated product picking. As a result, they have very few people working in them and often have low levels of lighting – hence the term dark store. To keep costs down low and be super-efficient

‘Shopping isn’t going anywhere, but there has been a strong shift to omnichannel retailing, which is important to note when selecting real estate investment opportunities’ these dark stores are massive – some are more than 50,000m2 in size (more than 3x the size of Eden Park). Grey stores can look a lot like a normal supermarket – but, again, they are not open to the public. Team members physically pick and pack products for grocery deliveries.

Murphy: What about classic retail, like shopping malls? They were already under pressure pre Covid-19.

Solly: Covid has increased the bifurcation of shopping locations. Retailers are separating into high end locations to showcase their products and brands at one end; at the other end convenient locations are key, and where you can easily get into stores grab what you need and get out – like the large format locations where home goods retailers sit with large car parks. This is a challenging environment for locations that don’t meet either end of the split. Shopping isn’t going anywhere, but there has been a strong shift to omnichannel retailing, which is important to note when selecting real estate investment opportunities.

Murphy: What is omnichannel retailing?

Solly: Omnichannel means retailers sell products to consumers in store and online. The move to omnichannel means retailers need to have great logistics and distribution networks, so

that all the packages we order turn up on time. According to data from 2019, e-commerce requires three times more logistics space than bricks-and-mortar sales do.

To do this, logistics providers like Mainfreight need to be located close to large populations in large efficient industrial warehouses, which allows efficient product racking and high levels of automation including robotics.

This changes the way retailers use their physical stores – they become more of a place for retailers to reinforce their brands and tell a story, rather than sell on the spot. A great example of this is an Apple Store. In these spaces, people learn about the products, and people visit for the experience of being in an Apple Store. Apple does not actually mind whether you buy the product in store or online.

Murphy: What changes has Covid meant for commercial property?

Solly: Covid has accelerated trends that were there before Covid, like flexible working for office tenants and the importance of online e-commerce for retailers. For investors, it’s highlighted that not all real estate securities are the same and that there is a need for diversity of security holdings across industry exposure like office, retail, industrial and different geographies. It has also highlighted that the debt levels in real estate securities cannot be so high that a drop in rental will reduce ability to pay dividends.

Murphy: Do you think businesses will have to change the way they use office buildings now that working from home has become more the norm?

Solly: Covid has meant many people have learnt that they can work from home to a degree with technology like Teams and Zoom making it easier to share and communicate. For some office workers in process-type roles, they may continue to work from home. But for most businesses, having people in the office will remain key to building their culture and sharing ideas.

But there is no doubt many businesses will retain flexibility for people to work out of the office, meaning they may need to allow for less people in their office at one time. Against this, businesses need to make sure they have a great space to attract their teams back into the office.

Interestingly, in NZ we have seen a number of office users (including central government) grow through Covid to the point where they actually need more space, not less.

Murphy: Property or real estate stocks have lagged the recovery in equity markets – why is that?

‘Real estate stocks offer an attractive 3.5% tax-paid income yield, with the yield potentially increasing at 2-3% over the next few years’ Solly: Real estate stocks offer an attractive 3.5% tax-paid income yield, with the yield potentially increasing at 2-3% over the next few years. But yes, they have lagged the recovery in returns of other growth assets.

Real estate stocks own physical property like office towers, shopping malls, industrial warehouses and hospital buildings. With tenants unable to access these buildings due to Covid containment lockdowns, there have been concerns about how much rental income real estate stocks would collect and, as a result, the ability of real estate stocks to pay income dividends to investors.

What has actually happened is that the degree of rental income has been higher than expected and real estate earnings and asset values have held up better than many investors had expected.

On average, over the last 10 years, NZ property securities have delivered slightly less than NZ equities per annum.

But a larger proportion of the real estate securities returns is from regular dividend income, and property securities tend to have less ups and downs than equity stocks.

We are seeing an increasing dispersion of returns in real estate stocks, so active management is key to ensure diversification, and to take advantage of technological disruptions and shifting business needs.

For people with a greater need for near term income, or less ability to withstand movements in their nest egg, property securities may be a good investment option for them. A

This does not constitute advice to any person. www.harbourasset.co.nz/disclaimer If you would like more information on the Harbour Real Estate Investment Fund, or any other Harbour Fund, please contact: Shannon Murphy, Investment Specialist Shannon.murphy@harbourasset.co.nz (09) 365 1925

WWW.GOODRETURNS.CO.NZ | 15

LEAD | GOOD RETURNS FUND MANAGER OF THE YEAR AWARDS 2020

Fund Manager of the Year Awards 2020 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

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ay 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 16 | ASSET 02 | 2021

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

‘What allowed ANZ to push past the other finalists into the top award, was probably their consistency across the year’ Darren Howlin

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

‘It was a real honour to receive the Adviser Choice award and be recognised by the advice community for our investing capabilities in 2020’ Ashley Gardyne

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.

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

FUND MANAGER

2020

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

OF THE YEAR Powered by

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.

‘We're committed to embedding our ethical framework into the way we invest, without compromising on returns’ 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

WWW.GOODRETURNS.CO.NZ | 17

LEAD | GOOD RETURNS FUND MANAGER OF THE YEAR AWARDS 2020

ANZ Investments wins Good Returns New Zealand Fund Manager of the Year award

A

NZ 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.

18 | ASSET 02 | 2021

“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.

F

inancial 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

At Booster, we like to think it’s our relentless focus on customer service, drive for innovative investment products and harder working relationship managers that sets us apart.

Great to know we are onto something!

Booster – voted #1 partner by the adviser community.

We look forward to continuing the good work.

booster.co.nz

WWW.GOODRETURNS.CO.NZ | 19

LEAD | GOOD RETURNS FUND MANAGER OF THE YEAR AWARDS 2020

Oldest & best: Smartshares NZ Top 10 ETF

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Smartshares CEO Hugh Stevens talks about its award-winning fund and the logic behind the increasing popularity of ETFs.

martshares 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 20 | ASSET 02 | 2021

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

WWW.GOODRETURNS.CO.NZ | 21

LEAD | GOOD RETURNS FUND MANAGER OF THE YEAR AWARDS 2020

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

Our active approach to investment

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 investment philosophy

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 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.

Finding out more

Sharon Mackay Head of third party Distribution sharon.mackay@fisherfunds.co.nz

22 | ASSET 02 | 2021

Adam Godfrey Distribution Support Manager adam.godfrey@fisherfunds.co.nz

Image caption: Fisher Funds NZ Sam Dickie

You can find out more about becoming an adviser partner of Fisher Funds by emailing our Distribution team.

Thanks for your vote!

Fisher Funds - Winner

Good Returns Powered by Research IP – Adviser Choice – Equities

WWW.GOODRETURNS.CO.NZ | 23

FEATURES | ADVISER PROFILE

From teen insurance salesman to MDRT Brian Burgess began his insurance career early. He shares his story from one-man band to joining SwainWoodham with Daniel Smith.

BY DANIEL SMITH

A

s some rugby players remark that it was inevitable for them to play professionally given their enthusiasm for the game, Brian Burgess believes that his passion for insurance means he was bound to find himself working in the industry.

Unlike many in the insurance business Burgess started young. “I have always been a real advocate for insurance. My 24 | ASSET 02 | 2021

sister worked with a lady whose husband was an insurance agent. I was 17-18 at the time. One of the things I used to do to earn some money was recommend people to him for insurance [and in return] I would get a little referral fee. I was probably just a bit of a natural born salesman. If I find something I like I tell people about it.”

But what started as a way for a teenager to earn a couple of extra

bucks soon turned into a lifelong career, especially after Burgess considered the perks that ran with the job. “When I started to consider the options, I was thinking about what business opportunities I have where I can dictate my own hours, dictate my income, work for myself, but also provide a product for people. When I put up what the industry offered against what I wanted I thought ‘hey, that is a pretty good match’.”

‘I got a couple of claims early on which cemented that this is a really good thing and I am glad that I am doing it’ The good match was solidified when a young Burgess got a couple of successful claims paid for his clients in the beginning. “I started talking to friends and family, doing what you do when you are new. I got a couple of claims early on which cemented that this is a really good thing and I am glad that I am doing it.”

Seeing the impact of a successful insurance claim on his clients’ lives deeply impacted Burgess in a way that has continued throughout his career and into his current role. “For me it is all about the claim. That is very much the ethos of the business I am a part of now, SwainWoodham. We articulate this to clients on a really regular basis, that we walk the talk. Nothing makes my [blood] boil more than when I see an adviser pointing their clients to an 0800 number.

Advisers need to look after their clients all the way through, they really need to be there at claim time.”

This firm belief in the role of the adviser continues to be central to Burgess as he finds himself in the more serious side of the insurance business. “As I am getting older I am getting into more dramatic situations [via clients]. I just feel that the adviser is in such an honoured position in their clients’ lives. We are so privileged.

People are on the phone with us really early on when they have concerns. I have been part of a journey with so many

people and it truly is an honour. We are so privileged to do what we do.”

Another person that Burgess feels honoured to be on the insurance journey with is his wife Lynette Anderson. Burgess says that he felt like a “wandering generality”, but that all changed when he met his wife Lynette.

“We became a team. From that moment we really got our act together. It just works really well, she handles client appointments, she’s my logistics genius, she does everything really. I give her huge amounts of credit for taking me from someone who was just bumping into things and trying to make it work, to when we got together [and] became a team that could really make things happen.”

This major gear shift in Burgess’ life and career came when his team expanded from a team of one to a team of two. Joining a large adviser organisation was the next stage in discovering that more boots on the ground can mean more achievement in helping clients.

“When I became part of a bigger and broader organisation, those philosophies I had built up over the years truly carried through. I did the solo thing for such a long time until Lynette came along. I went from home to home trying to figure it out, I was very much a one-man band.

The power of coming together with the guys at SwainWoodham, to build a case, to discuss a claim, to look at a different angle, to share knowledge, it is just gold.

I don’t know how people can do without it, it would be such a mission to go back to solo now.

“I guess it is just that power of synergy.

When two people come together they get more of a result than two individuals working alone. Bigger and better things happen basically. You leverage their knowledge, you get inspired by them when you are having a flat patch. The chairman of SwainWoodham when I joined was Ken Swain and he talked about joining MDRT [Million Dollar

Round Table] which was something I just never thought I could remotely aspire to.

But then those numbers soon became a reality. Having a guy like Ken who could really help you lift your sights was vital.”

Looking ahead to an industry that is going to be facing huge regulation change in the coming year, Burgess is confident that advisers have what it takes to see things through. “At the end

‘The power of coming together with the guys at SwainWoodham, to build a case, to discuss a claim, to look at a different angle, to share knowledge, it is just gold’ of the day all we have to do is prove what we have been doing already. Most advisers do a good job. Some people like to throw rocks at other advisers, but by and large most of them do a bloody good job. We are going to keep doing what we have always done, but we are just going to make sure we can demonstrate it not only to a third party but also to the client.

I just don’t see that as a bad thing.”

When Burgess isn’t working he is a man being kept youthful by his six children and his nine grandchildren (plus one more on the way). Burgess also enjoys cooking on his Weber barbeque grill, sipping a good wine and watching whatever sport happens to be showing on the telly. A WWW.GOODRETURNS.CO.NZ | 25

REGULARS | INVESTMENT COMMENTARY

A bond is broken Gone are the days of the boringly dependable bond, writes David van Schaardenburg.

BY DAVID VAN SCHAARDENBURG

W

hen Ian Fleming was thinking of a name for the central character of his thriller spy novels amongst the range of theories was that he sought a name which would be deadly dull and unremembered. Hence the surname “Bond”. As a member of the famed merchant banking family, most notable for his grandfather founding Robert Fleming and Co, Ian Fleming most likely had a view that bonds were dependable and boring delivering a steady return to investors with little risk.

History can be an illusion If one looks at bond index performances for most of the last 35 years, Fleming was right.

Since the high inflation era of the 1970s and 1980s successful central bank monetary policy has driven down inflation, bond yields and ultimately interest rates. Over these decades bond investors have enjoyed both relatively high (to today) bond coupon payments and with relentlessly declining yields, 26 | ASSET 02 | 2021

capital gains. The last part of this decline to new record low interest was driven by the unexpected event of a global pandemic. Bonds have been boring yet great performers for the last 35 years.

A la James?

However, in the latter part of Q3 2020, with US 10-year Treasury yields reaching 0.5% and NZ government bond yields similar, doubt was growing in my mind that bonds would in future perform the same valued role they had performed for decades. This is especially apparent for conservative and balanced portfolios where bonds made up more than 50% of the investments.

I’ll take a stronger view. There has been for the last year no logical reason to hold bonds in the portfolio of any investor. For investors with short-term horizons, cash even at near nil interest rates is a better risk. For investors with five-year plus horizons, I prefer shares especially those with good free cash flow (and therefore ability to reinvest and/or pay dividends) over virtually any bond investment.

This is a classic example of where historic performance is no predictor of future performance!

Why the asset allocation model is broken The US has had a commonly held view that a portfolio 60% shares and 40% bonds is the optimal asset allocation for most retirees. In New Zealand, KiwiSaver default funds are required to hold a minimum of 75% in bonds or cash (soon to be 50%) while the typical balanced fund will have a benchmark asset allocation c. 50% shares and property/50% bonds and cash.

As stated in my last article, the standard investor risk assessment process biases many investors, especially those close to or in retirement, towards being a conservative or balanced risk profile many likely preferring this status without fully understanding the longterm return and financial planning implications.

The lower return impact on such portfolios is now accentuated by the negative contribution their material allocation to bonds is likely to achieve for at least the next five years.

Having been an adherent to the validity of conventional asset allocation

'There has been for the last year no logical reason to hold bonds in the portfolio of any investor'

‘Bonds have been boring yet great performers for the last 35 years.

A la James?’ across all risk profiles, I now find myself in a position of believing: “For most investors mid to low-risk asset allocation strategies make no sense.”

While in some ways it’s easier to cling to convention and the past ways that have served clients well, this is no longer the case.

By not driving change fund managers and investment advisers might be the winners short term by maintaining their (high) fees on low to medium risk portfolios where 50% plus of the assets are delivering nix. But this has longerterm business risks as disappointed clients increasingly turn to alternative investment approaches.

What might the next five years look like?

While a short-term microcosm, we are already seeing the negative effect on investor returns from the start of the normalising of bond yields.

Taking the returns (post tax, fees) of two funds in the period from September 30, 2020, close to the time of bond yield lows, up to the end of February 2021. On one side a NZ government bond fund the other a NZ share fund.

With bond yields starting to rise over this period, the NZ bond fund achieved a negative return of 7.5% while the NZ share fund had a positive return of 3.3%.

Clearly bonds are no longer “safe and boring”.

Extrapolating this trend further.

By investing in a bond fund with a portfolio duration of five years, and assuming that inflation and risk premiums trend up over the next five years back to the long-term average, the portfolio yield will rise to around 250bps above today’s yield levels. This equates to additional capital losses of 12.5% for such a portfolio more than offsetting post fees coupon payments from the bonds.

Based on this example, conventional bond funds will most likely deliver a negative return to investors over the next five years to add to the losses of the last six months.

Expect your conservative and balanced clients to not be too thrilled by this prospect.

What are the risks for the advice industry?

I expect the growing trend we have seen in the US, that is to cut out the middle man (read fund managers and/or investment advisers), to grow exponentially in New Zealand. This growth trend I expect to accelerate for four reasons.

•

Investment advisers struggling to shift the thinking of their existing (read older) client base.

•

An inability of most fund managers to efficiently reposition their clients to invest via bond-less portfolios.

•

Financial regulations and supposed “best practice” pushing advisers to allocate clients into portfolios laden with bonds.

•

Low to medium risk managed funds/ portfolios including KiwiSaver becoming synonymous with relatively high fees and low nominal performance.

If the above expectations come to bear, I expect a rising proportion of the next

generations of near retirees to first explore the Hatch or Sharesies type of investing solution before talking to a financial adviser.

The cutting edge of the investment industry has clearly shifted towards new technologies facilitating low cost, flexible and transparent direct investing.

While there are risks in investors going alone, further improvements in these technologies especially in the area of robo-advice should further strengthen their appeal versus the relatively cumbersome and costly process (saddled by extra layers of regulation) of using a financial adviser.

How can advisers help their clients … and survive?

First, throw the conventional “rule book” on risk profiling and asset allocation out the window.

Second, have a strategy to engage with clients to help them evolve their understanding of how today is different from the past 30 years.

Third, don’t blindly rely on fund managers to “fix” the problem. This doesn’t mean they lack the capability. But in most circumstances they are restricted in how dynamic they can be in altering portfolio composition in the absence of material rewrites of their offering documents. Which is a significant process and takes time.

Find out how they are dealing with this new dilemma then apply your collective learnings to client strategies.

Clients pay you to add objective insight and improve the probability they will achieve their financial objectives. It’s also critically important they understand how and why you are recommending change especially a material one.

Real opportunity exists for advisers to add or subtract value to clients over the next five years. Unfortunately, this will not be achieved by following established conventions. A David van Schaardenburg is an independent investment analyst.

WWW.GOODRETURNS.CO.NZ | 27

REGULARS | PRACTICE MANAGEMENT

’S

WHAT

ING?

EN HAPP

NG WRO

AN

S SWER

ONLY

Strategies for improving life application honesty “Wrong answers only” is a current social media fad – but it has no place in life insurance.

BY RUSSELL HUTCHINSON

28 | ASSET 02 | 2021

own focus. People pleasing and shame – social motivations to tell what the client might perceive as a “harmless” lie are the problem we face most often.

Fear or shame

T

here is a game played on social media where a picture is posted and captioned – along the lines of “Tell me what’s happening in this picture – wrong answers only.” That’s a great device for getting some comic captions.

It is almost the opposite of what we are trying to achieve with application forms for life and health insurance. Of course, almost all clients take the questions seriously. Most try to give the right answers.

Some fail.

Why do they fail and what – if anything - can advisers and insurers do about it?

It is worth asking why people give the wrong answers so often.

Forgetfulness Sometimes they just forget.

With a busy life you can forget some pretty big things. I got my hand x-rayed after a cricket injury. Pointing out where bone had regrown around what they believed was a previous break in one of the small bones, they asked: “When did you break your hand?”

I had no knowledge of any break. But in my misspent youth, it was possible I could have done that and forgotten.

Possibly I wasn’t even aware when it happened. At times touch-rugby and cricket were pretty much liquid-fuelled affairs for me in the dim past.

Other motivations Some people’s forgetting is a bit more, shall we say, purposeful than that.

The important thing here is what the motivation is behind the desire to change the facts.

Fear, shame, people pleasing and fraud are candidates.

Fraud is very rare. Most people do not sit down and deliberately set out to defraud insurers – and along the way cause a lot of grief for their adviser.

A few do. We can all recall cases.

This column is not about them.

Spotting deliberate attempts at fraud is a worthwhile study and deserving of its

Fear, or just being a bit scared, can make some people do things they regret. They have literally never thought about how to back out of a situation where, say, they are with an insurance adviser and their partner in life and are filling in an application form, and they see a question about, say, intravenous drug use.

They do not want to clarify. They have never talked about this with their partner.

They panic – and tick “no”.

They know they should have ticked “yes” but now a few handy rationalisations creep in – “surely they don’t mean something that took place 30 years ago” or “well I only did it once … they probably mean drug users, right?”.

Shame is another big one.

It particularly comes into play when asking questions about health where some stigma may be attached to the answers. Perhaps the client does not wish to own up to sexual health issues, or mental health issues, or a same sex relationship in the past.

I know one actuary who has held roles running underwriting teams as well who made a study of non-disclosure and found this to be a major contributor.

Their view was that it is hard for the adviser to overcome a general social condition. Until New Zealand as a whole is more accepting, it will be hard for individuals to be more honest.

I know an adviser who made personal disclosure to the client – a tool to try and make them feel comfortable with the required disclosures.

People pleasing People pleasing features as a contributor to untruths. Clients see you as smart, successful, and knowledgeable about the financial world. They want to appear smart too. That means not asking you too many dumb questions.

They also don’t want to muck this up – look like they haven’t done it before. They are thinking: What’s the “right” answer?

And not really believing your little talk about the importance of the honest answer.

Especially a factor where the perceived power imbalance is large. Especially if it is felt – even subconsciously – that you would much prefer it if there were no health conditions to hold up underwriting. It is amazing how these moods can be detected by people even when not spoken.

Several things have been tried. Many advisers and insurers try hard all the time to get the truth from clients.

Training sessions on the approaches to running the part of the sales process on completing the personal statement have loads of useful strategies. Height and weight can be dealt with by carrying a tape measure and a set of scales.

Sharing personal stories of your own can help. Reading the legal declaration before completing the questions can help too.

Online or tele-underwriting Offering alternatives such as completion at a different time, online, or using teleunderwriting services all have value.

Currently two big themes with insurers and reinsurers alike are using online applications and rewriting questions in ways which behavioural science suggest will gather better answers. These are both helpful, but not yet silver bullets, capable of slaying all dishonesty.

Online applications, or applications robots, have been found by several insurers to routinely generate more honest answers, under certain conditions, than when a human adviser helps the client. The necessary conditions are that the client is alone, believes the answers are confidential, and they do not imagine a human reading the answers.

Clearly those conditions do not exist all the time. Also, two problems beset the robots. One is that clients struggle when they do not understand the question – so often they abandon and need to call for help. Sometimes they just abandon.

Improving the robot – often by imbuing it with more human characteristics, can help reduce abandonment but reintroduces the problem of social pressure, and with it, more lies.

Improvements in questions are worth exploring. These take time to have an effect. They are incremental and results are slow to come. They also exist within the contexts we have mentioned – social and systematic.

Theories abound. Like most persistent problems, getting the truth in application forms is difficult and complex.

Improvements may only come from a combination of solutions in concert.

Probably the single best X-factor in the whole equation is you – whatever the systematic features, I believe that you can make a difference. A Russell Hutchinson is director of Chatswood Consulting and Quality Product Research, which operates Quotemonster.

WWW.GOODRETURNS.CO.NZ | 29

FEATURES | DATA

2020 was nothing short of confounding Mercer’s annual review of asset classes shows how one year’s winners can quickly become next year’s losers, and vice versa.

Predicting what may happen next poses a big challenge to even the most avid market followers.

30 | ASSET 02 | 2021

F

or investors in diversified funds including KiwiSaver, a relatively narrow portfolio emphasising shares and bonds, with something of a domestic bias, proved hard to beat in 2020.

However, it is too easy to conclude that simple is superior. With few asset classes standing out as obviously ‘cheap’ at present, the argument for wider diversification is perhaps as strong as ever.

Exposure to non-traditional asset classes can serve to balance out the path of returns over time, so long as the risks are understood and access is attained on a cost-effective basis.

In sum, one can while away the hours making additional observations on the Periodic Table, and perhaps identify patterns. But are they real or illusory? The unpredictable nature of capital markets is unavoidable.

The table serves as a reminder to investors to establish their risk tolerances, avoid the temptation to pick winners, allocate to a range of asset types and focus on the longer term. In that way, there is a greater chance that periods of market disruption such as we saw in 2020 can be tolerated, rather than spark a panic reaction. A

WWW.GOODRETURNS.CO.NZ | 31

REGULARS Latest 1Yr 3Yr 5Yr Size Morningstar Transaction Return Return Return $M Rating Exit price % Overall

Name

NZ Insurance Cash AMP ARS-Cash AMP KiwiSaver Cash Fund AMP NZRT Cash Fund AMP Prem PSS OnePath NZ Cash AMP PSS Select Cash ANZ Default KiwiSaver Scheme-Cash Aon KiwiSaver ANZ Cash Aon KiwiSaver Nikko AM Cash ASB KiwiSaver Scheme's NZ Cash BNZ KiwiSaver Cash Fund Booster KiwiSaver Enhanced Income Fidelity Life Super-Super Cash Portfolio Fisher TWO KiwiSaver Scheme-Presv Kiwi Wealth KiwiSaver Scheme Cash Mercer KiwiSaver Cash Milford KiwiSaver Cash NZ Defence Force KiwiSaver Cash OneAnswer KiwiSaver-Cash Fund SIL 60s + Sup Cash Fund SIL 60s + Sup Cash Fund Summer New Zealand Cash Westpac KiwiSaver-Cash Fund

2.04545 1.5588 1.55029 1.63788 1.53255 1.4988 15.83057 14.94762 1.5278 1.2086 1.5627 2.8344 3015.78632 --1.0039 -1.447 2.3023 2.3023 1.0481 1.4567

11.97 11.26 11.48 11.40 11.18 12.41 11.78 12.54 11.82 12.10 11.74 11.72 12.58 12.68 11.72 11.86 11.49 12.42 12.17 12.17 11.67 12.42

1.22 0.84 1.03 0.98 0.78 1.66 1.14 1.38 1.30 1.60 1.21 0.84 1.55 1.92 1.27 -1.06 1.61 1.50 1.50 0.87 1.55

1.53 1.16 1.34 1.36 1.17 1.90 1.42 1.73 1.63 1.96 1.50 1.04 1.83 2.24 1.60 -1.41 1.83 1.73 1.73 -1.83

5.36 98.71 82.13 3.03 0.81 18.18 5.65 2.47 665.31 235.65 35.89 6.04 31.59 300.16 27.67 16.26 2.95 63.10 1.69 1.69 3.96 493.49

-----------------------

47.15 38.51 46.47 43.04

11.93 15.02 12.03 15.22

11.20 10.54 11.46 13.09

7.94 5.52 17.41 46.71

2 3 3 4

----

7.80 12.00 12.00

4 3 3

NZ Insurance Equity Region Australasia AMP ARS-NZ & Australian (multi-manager) AMP ARS-NZ & Australian (Value) AMP NZRT Australasian Shares OneAnswer KiwiSaver-Australasian Share

4.96667 5.806 1.95164 2.8236

NZ Insurance Equity Region Australia AMP KiwiSaver Australasian Shares Summer Australian Equities Summer Australian Equities

1.6261 1.4481 1.4481

46.61 12.10 53.39 7.32 53.39 7.32

4.04074 3.56496 9.3718 -8.8188 1.6723 1.6723

46.54 42.49 40.45 -40.91 44.21 44.21

14.78 14.73 8.37 -15.34 14.08 14.08

12.71 13.32 11.10 -13.23 ---

7.88 7.29 9.11 11.65 30.06 19.30 19.30

3 3 1 -3 3 3

45.32 46.52 56.43 55.90 48.39 52.71 48.56 41.38 41.38

14.19 12.73 11.64 11.39 14.27 19.75 14.33 12.81 12.81

12.82 11.22 12.27 12.04 13.77 15.35 13.77 ---

8.67 10.81 41.35 18.81 67.50 16.78 11.31 26.46 26.46

3 2 3 2 5 4 4 3 3

14.52 11.94 9.76 10.73 12.89 11.38 12.81 11.28 9.98 -11.50 13.23 15.76

13.06 12.46 13.00 --12.19 12.85 12.59 10.37 -10.79 12.67 14.18

7.26 3.51 4.44 5.81 7.79 11.66 15.34 9.77 3.25 25.96 70.57 31.49 222.51

5 3 2 3 4 3 4 3 2 -3 3 5

---

---

2.32 0.82

4 3

4.76 -3.67

4.48 6.98 8.34

3 5 2

NZ Insurance Equity Region NZ AMP Prem PSS ACI NZ Shares AMP Prem PSS ACI NZ Shares Index Fidelity Life NZ Shares Portfolio Fidelity Life Super-Super NZ Share SIL 60s + Sup NZ Share Fund Summer New Zealand Equities Summer New Zealand Equities

NZ Insurance Equity Region World AMP Prem PSS ACI Global Shares Index AMP Prem PSS FD Intl Share Fund 1 Value Mercer KiwiSaver Shares NZ Defence Force KiwiSaver Shares OneAnswer KiwiSaver-Intl Share OneAnswer KiwiSaver-Sustainable Int Shr SIL International Share Summer Global Equities Summer Global Equities

3.29182 1.89322 --2.8641 3.0845 5.4665 1.7937 1.7937

NZ Insurance Equity Region World - Hedged AMP ARS-International Shares (Growth) 2.20497 AMP ARS-International Shares (Passive) 2.38644 AMP ARS-International Shares (Value) 1.96843 AMP KiwiSaver International Shares 1.7328 AMP KiwiSaver Passive International 1.822 AMP NZRT International Shares 2.11117 AMP NZRT Passive International Shares 2.18083 AMP Prem PSS ACI Global Shares Index Hdg 3.32503 Fidelity Life International 3.5339 Fidelity Life Super-Sup Intl -Fidelity Life Super-Super Aggressive -Fisher FuturePlan - Intl Coms 4.7758 Fisher TWO KiwiSaver Scheme-Eq 7082.76137

39.70 62.62 71.49 55.95 55.04 56.06 55.28 70.26 51.89 -47.05 60.52 59.65

NZ Insurance Equity Region World Non-PIE TOWER EnRoute Gold - Intl Companies Fd 29.23933 TOWER Investment Account Int'l Companies 2.66108

---

NZ Insurance Equity Sector Global - Real Estate AMP ARS-Listed International Property AMP KiwiSaver Property OneAnswer KiwiSaver-Intl Property

4.72735 1.3158 1.6068

43.21 7.41 43.16 9.71 35.16 5.69

NZ Insurance Equity Sector NZ - Real Estate AMP ARS-Listed NZ & Australian Property MFL Property Fund OneAnswer KiwiSaver-Australasian Prpty Summer Listed Property Summer Listed Property

4.68493 5.5282 2.6757 1.4626 1.4626

40.00 54.14 47.67 45.12 45.12

12.31 8.21 3.45 11.04 8.08 543.28 14.27 10.07 33.28 13.22 -8.34 13.22 -8.34

2.69338

12.77 3.12 12.33 3.00

2 3 5 3 3

NZ Insurance Global Bond AMP ARS-International Fixed Interest 32 |International ASSET AMP KiwiSaver Fxd 02 Intr

| 2021 1.1203

2.29 --

1.61 1.17

2 2

Latest 1Yr 3Yr 5Yr Size Morningstar Transaction Return Return Return $M Rating Exit price % Overall AMP NZRT International Fixed Interest 1.31112 12.57 3.69 2.68 2.15 3 AMP Prem PSS PIMCO Global Fixed Interest 2.5434 12.09 2.72 2.97 3.23 3 AMP Prem PSS SSgA Global Fixed Int Index 2.15608 12.59 3.17 2.13 6.29 3 OneAnswer KiwiSaver-Intl Fxd Int 1.8896 10.73 3.73 2.69 2.59 3 Summer Global Fixed Interest 1.1202 16.70 4.25 -1.10 4 Summer Global Fixed Interest 1.1202 16.70 4.25 -1.10 4 Name

NZ Insurance Miscellaneous AMP ARS-UK Cash Booster KiwiSaver Capital Guaranteed FANZ Lifestages KiwiSaver Income Kiwi Wealth KiwiSaver Scheme CashPlus Westpac KiwiSaver-Capital Protect Plan 4 Westpac KiwiSaver-Capital Protect Plan 5

0.74702 1.1382 1.14305 -3.2125 2.7942

5.93 11.46 12.25 12.48 56.76 56.82

-0.08 1.13 2.41 2.19 12.63 12.64

-1.63 1.66 2.23 2.35 12.44 12.45

5.55 61.68 118.50 119.91 26.29 21.30

-------

--

--

--

--

2.36

--

17.8561 1.76529

---

---

---

0.05 0.15

---

45.71 49.02 46.36 45.26 64.54 47.75 46.83 49.14 46.59 45.09 47.34 49.32 58.79 48.76

9.61 9.31 10.01 9.04 15.50 11.94 14.07 10.61 11.63 12.39 10.65 10.19 -9.93

9.94 -10.28 9.34 14.71 11.25 12.32 10.26 10.34 12.12 10.99 10.77 -10.52

487.34 37.70 328.71 39.37 161.83 520.36 202.25 196.00 93.14 1302.97 2016.00 256.46 416.53 37.35

3 2 3 2 5 4 5 3 3 4 5 4 -3

AMP ARS-Balanced 2.61471 34.25 7.76 AMP Ethical Balanced Fund 1.4201 37.97 7.96 AMP KiwiSaver AMP Global Multi-Asset 1.2125 25.57 2.88 AMP KiwiSaver AMP Income Generator 1.3142 30.82 6.92 AMP KiwiSaver ASB Balanced 1.4243 33.77 7.58 AMP KiwiSaver LS Balanced Fund 2.1363 33.82 7.58 AMP KiwiSaver LS Moderate Balanced Fund 2.0435 29.42 6.58 AMP KiwiSaver Mercer Balanced 2.313 33.74 7.35 AMP NZRT AMP Balanced Fund 3.77729 34.24 7.77 AMP NZRT AMP Global Multi-Asset 1.2075 25.56 3.00 AMP NZRT AMP Income Generator 1.32357 31.04 7.38 AMP NZRT AMP Moderate Balanced 2.67962 29.81 6.76 AMP NZRT ASB Balanced Fund 2.6686 34.52 7.87 AMP NZRT Mercer Balanced 3.10882 34.12 7.51 AMP NZRT Nikko AM Balanced 3.48424 40.14 7.89 AMP NZRT Responsible Investment Bal 1.42682 38.56 8.18 AMP PSS Lifesteps Consolidation 2.15731 28.38 5.69 AMP PSS Lifesteps Progression 2.35553 32.72 6.76 AMP PSS Select Balanced 2.27211 32.86 6.86 ANZ Default KiwiSaver Scheme-Balanced 2.2192 34.09 8.27 ANZ KiwiSaver-Balanced 2.3174 34.09 8.28 Aon KiwiSaver ANZ Balanced 32.48556 38.68 8.72 Aon KiwiSaver Russell Lifepoints 2035 11.6236 34.98 8.28 Aon KiwiSaver Russell Lifepoints Bal 12.19338 38.01 8.90 ASB KiwiSaver Scheme's Balanced 2.3601 35.29 8.32 BNZ KiwiSaver Balanced Fund 1.8796 31.73 8.46 Booster KiwiSaver Balanced 2.2498 33.38 8.79 Booster KiwiSaver Socially Rsp Inv Bal 1.7714 32.82 9.86 Fidelity Life Balanced 5.773 33.09 7.36 Fidelity Life Super-Super Balanced -33.01 8.50 Fisher FuturePlan - Balanced 5.33425 34.55 8.72 Fisher TWO KiwiSaver Scheme-Bal 6613.48775 35.83 9.79 Kiwi Wealth KiwiSaver Scheme Balanced -36.58 8.61 Mercer KiwiSaver Balanced -34.12 7.40 Milford KiwiSaver Balanced Fund 2.8876 39.54 10.11 NZ Defence Force KiwiSaver Balanced -33.74 7.18 OneAnswer KiwiSaver-Balanced 2.3504 34.11 8.29 Summer Balanced Selection 1.4268 31.43 8.58 Summer Balanced Selection 1.4268 31.43 8.58 Westpac KiwiSaver-Balanced Fund 2.2973 36.86 8.54 Westpac Retirement Plan - Balanced Port 4.5812 35.25 7.25

7.74 ----7.50 6.45 7.32 7.73 --6.65 8.13 7.53 8.19 -5.63 6.72 6.81 7.42 7.44 7.93 8.66 9.09 8.43 8.59 8.15 8.59 7.28 7.90 7.84 8.84 8.39 7.65 9.84 7.42 7.46 --8.29 7.07

131.77 20.62 11.23 5.12 34.72 1079.48 809.69 59.66 889.78 3.78 2.86 297.16 98.97 146.91 182.07 6.99 5.61 1.84 47.85 216.69 3057.15 36.12 27.04 228.55 2475.36 629.10 623.52 153.26 5.55 295.90 134.02 1105.46 2058.53 501.43 604.84 77.43 679.78 121.91 121.91 1969.28 89.93

3 3 1 1 3 3 2 3 3 1 2 2 3 3 3 3 1 2 2 3 4 4 4 5 4 5 4 4 2 4 4 5 4 3 5 3 4 4 4 4 2

-----

3.41 3.21 1.77 2.57

3 5 4 4

NZ Insurance Miscellaneous Non-PIE TOWER Vital Fund

NZ Insurance Mortgages Non-PIE TOWER EnRoute Gold - Fixed Income TOWER Investment Account - Fixed Income

NZ Insurance Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund AMP KiwiSaver Nikko AM Growth AMP NZRT AMP Aggressive AMP PSS Select Growth Booster KiwiSaver Geared Growth Booster KiwiSaver High Growth Booster KiwiSaver Socially Rsp Inv Hi Gr FANZ Lifestages KiwiSaver High Growth Fisher FuturePlan - Growth Generate KiwiSaver Focused Growth Fund Kiwi Wealth KiwiSaver Scheme Growth Mercer KiwiSaver High Growth Milford KiwiSaver Aggressive NZ Defence Force KiwiSaver High Growth

2.102 1.5717 4.32885 2.36835 3.2945 2.1898 2.6608 1.61169 4.27443 2.2945 --1.3581 --

NZ Insurance Multisector - Balanced

NZ Insurance Multisector - Balanced Non-PIE Sovereign - Colonial Invstrbds - Beaver TOWER EnRoute Gold - VIP Balanced Fund TOWER Investment Account - VIP Bal Port TOWER VIP Managed Bond

0.498 30.32771 2.97512 17.10119

-----

-----

Name

Latest 1Yr 3Yr 5Yr Size Morningstar Transaction Return Return Return $M Rating Exit price % Overall

NZ Insurance Multisector - Conservative AMP KiwiSaver ANZ Conservative AMP KiwiSaver Default (Default) AMP PSS Select Income ANZ Default KiwiSaver Scheme Cnsrv(Dflt) Aon KiwiSaver Russell Lifepoints 2015 Aon KiwiSaver Russell Lifepoints Cnsrv ASB KiwiSaver Scheme's Cnsrv (Default) BNZ KiwiSaver Conservative (Default) BNZ KiwiSaver First Home Buyer Fund Booster KiwiSaver Default Saver Fisher FuturePlan - Capital Prot Fisher TWO KiwiSaver Cash Enhanced(Dflt) Kiwi Wealth KiwiSaver Scheme Default Mercer KiwiSaver Conservative (Default) Milford KiwiSaver Conservative Fund NZ Defence Force KiwiSaver Conservative OneAnswer KiwiSaver-Conservative Westpac KiwiSaver Default

1.2461 1.8845 1.88488 2.0272 10.90633 11.4185 2.0267 1.4733 1.2306 1.413 1.28245 2.03955 --1.9755 -1.9805 1.4063

20.32 19.92 10.31 20.80 23.38 23.38 19.17 18.14 16.65 19.67 13.13 21.87 20.91 19.79 23.22 19.96 20.71 21.39

5.38 4.51 1.83 5.75 5.49 5.50 4.88 4.23 3.38 5.17 1.51 5.62 5.15 4.59 5.86 4.38 5.37 5.08

-4.53 1.85 4.94 5.46 5.46 4.81 4.69 3.82 4.85 1.50 5.21 5.20 4.68 6.19 4.37 4.59 4.79

24.79 1338.46 0.89 1216.22 4.73 79.11 4118.07 918.42 219.86 120.16 16.59 724.18 340.70 1186.35 170.14 7.62 507.14 351.81

4 3 2 5 4 5 3 3 2 4 1 4 4 4 5 2 4 3

42.80 40.84 47.68 41.88 42.39 39.47 42.92 39.63 48.12 42.24 49.47 41.05 41.04 48.58 41.04 50.15 38.84 41.47 43.81 43.93 39.35 41.36 43.07 40.99 45.79 41.33 42.04 42.76 50.25 42.34 41.05 48.60 41.25 41.25 38.90 44.21 42.58

9.33 9.97 11.14 8.85 9.18 7.59 9.52 8.92 11.35 9.00 9.34 8.41 9.60 10.84 9.61 12.29 7.87 9.69 10.09 9.59 10.61 10.96 9.47 10.61 12.43 10.67 11.62 8.89 12.31 8.61 9.63 10.87 9.77 9.77 -9.95 8.78

9.45 8.88 --9.28 7.89 9.59 7.85 ---8.47 8.85 10.14 8.84 11.94 8.03 10.12 10.40 10.05 10.72 10.14 9.54 9.82 11.71 10.12 10.71 9.40 11.98 9.12 8.87 10.18 8.97 8.97 -9.71 8.57

49.49 314.94 39.64 31.11 872.64 99.67 275.43 297.53 19.08 19.51 27.83 0.15 227.67 212.67 2725.59 184.57 11.85 22.90 57.36 4047.74 997.65 439.16 5.69 172.71 2773.87 708.43 976.29 160.84 2281.88 35.07 591.99 527.42 95.16 95.16 44.95 2103.84 117.02

2 3 4 2 2 2 3 2 4 2 1 1 3 4 4 5 2 3 4 3 5 3 2 3 5 4 4 3 5 3 4 5 3 3 -4 3

--

--

--

1.18

4

21.17 24.42 20.51 25.26 25.72 14.22 19.41 25.62 24.98 26.13 19.41 24.01 19.58 27.42 27.43 27.52 30.39 25.65 25.32 23.65

4.83 5.29 4.60 5.68 5.62 3.49 3.56 5.90 5.41 5.86 3.63 4.68 3.72 6.89 6.90 6.55 7.24 6.06 6.61 6.25

4.58 -4.33 5.52 -4.18 3.30 5.74 --3.34 4.61 3.48 6.02 6.03 6.83 7.28 6.14 6.89 5.66

35.52 23.37 437.36 620.70 37.62 112.40 319.98 185.16 18.34 18.70 3.37 5.65 7.81 86.66 1490.37 24.06 29.82 2246.63 679.88 213.69

2 2 2 3 3 2 1 3 2 3 1 2 2 4 4 4 5 4 5 3

NZ Insurance Multisector - Growth AMP ARS-High Growth AMP KiwiSaver ANZ Balanced Plus AMP KiwiSaver ANZ Growth AMP KiwiSaver ASB Growth AMP KiwiSaver LS Growth Fund AMP KiwiSaver Nikko AM Balanced AMP NZRT AMP Growth AMP NZRT ANZ Balanced Plus AMP NZRT ANZ Growth AMP NZRT ASB Growth AMP NZRT Nikko AM Growth AMP PSS Lifesteps Growth ANZ Default KiwiSaver Scheme-Balanced Gr ANZ Default KiwiSaver Scheme-Growth ANZ KiwiSaver-Balanced Growth Aon KiwiSaver Milford Aon KiwiSaver Nikko AM Balanced Aon KiwiSaver Russell Lifepoints 2045 Aon KiwiSaver Russell Lifepoints Growth ASB KiwiSaver Scheme's Growth BNZ KiwiSaver Growth Fund Booster KiwiSaver Balanced Growth Fidelity Life Growth Fidelity Life Super-Super Growth Fisher Funds Growth KiwiSaver Fund Fisher TWO KiwiSaver Scheme-Gr Generate KiwiSaver Growth Fund Mercer KiwiSaver Growth Milford KiwiSaver Active Growth Fund NZ Defence Force KiwiSaver Growth OneAnswer KiwiSaver-Balanced Growth OneAnswer KiwiSaver-Growth Fund SIL 60s + Sup Balanced Fund SIL 60s + Sup Balanced Fund Summer Growth Selection Westpac KiwiSaver-Growth Fund Westpac Retirement Plan - Dynamic Port

2.47075 2.7348 1.576 1.5273 2.128 2.3752 3.0082 3.44918 1.57327 1.51243 1.55173 2.43101 2.3349 2.4307 2.4777 4.84062 23.72025 11.84135 12.60989 2.4402 2.1257 2.365 6.0433 -2.9354 2.41232 2.1313 -4.8834 -2.5146 2.6456 5.7545 5.7545 1.2244 2.4724 5.451

NZ Insurance Multisector - Growth Non-PIE Sovereign - Colonial Invstrbds - Stag

0.5658

NZ Insurance Multisector - Moderate AMP ARS-Conservative AMP KiwiSaver ASB Moderate AMP KiwiSaver LS Conservative Fund AMP KiwiSaver LS Moderate Fund AMP KiwiSaver Nikko AM Conservative AMP NZRT AMP Capital Assured Fund AMP NZRT AMP Conservative AMP NZRT AMP Moderate AMP NZRT ASB Moderate AMP NZRT Nikko AM Conservative AMP PSS Lifesteps Maturity AMP PSS Lifesteps Stability AMP PSS Select Conservative ANZ Default KiwiSaver Scheme-Cnsrv Bal ANZ KiwiSaver-Conservative Balanced Aon KiwiSaver Russell Lifepoints 2025 Aon KiwiSaver Russell Lifepoints Mod ASB KiwiSaver Scheme's Moderate BNZ KiwiSaver Moderate Fund Booster KiwiSaver Moderate

2.58641 1.2817 2.0257 2.0253 1.2915 2.84165 3.22753 2.58059 1.28672 1.28719 1.91373 2.10063 2.00722 2.1103 2.1467 11.07284 11.97941 2.1787 1.6857 2.0195

For more information call 0800 888 361 Name Fisher Funds Conservative KiwiSaver Fund Fisher TWO KiwiSaver Scheme-Cnsrv Generate KiwiSaver Conservative Fund Kiwi Wealth KiwiSaver Scheme Cnsrv Mercer KiwiSaver Moderate Milford KiwiSaver Moderate NZ Defence Force KiwiSaver Moderate OneAnswer KiwiSaver-Conservative Bal Summer Conservative Selection Westpac KiwiSaver - Moderate Westpac KiwiSaver-Conservative Fund

Latest 1Yr 3Yr 5Yr Size Morningstar Transaction Return Return Return $M Rating Exit price % Overall 1.881 22.15 5.99 5.41 1043.45 3 2.13601 22.67 5.91 5.49 178.47 3 1.6034 25.46 7.46 6.04 474.34 4 -25.31 6.12 5.43 959.22 3 -25.94 5.74 5.83 178.70 4 1.1759 29.64 --- 37.22 --25.58 5.51 5.59 6.93 3 2.1682 27.44 6.91 6.05 232.10 4 1.1155 24.05 --- 11.53 -1.5335 28.57 6.68 6.35 761.84 5 1.9574 22.78 5.28 5.02 2995.63 3

NZ Insurance NZ Bonds AMP ARS-NZ Fixed Interest AMP KiwiSaver NZ Fixed Interest AMP NZRT NZ Fixed Interest AMP Prem PSS ACI NZ Fixed Interest Fidelity Life NZ Fixed Interest Fidelity Life Super-Super Fixed Int OneAnswer KiwiSaver-NZ Fixed Interest SIL 60s + Sup NZ Fixed Interest SIL 60s + Sup NZ Fixed Interest Summer New Zealand Fixed Interest Summer New Zealand Fixed Interest Summer New Zealand Fixed Interest Westpac Retirement Plan - Accum Port

2.79774 1.1578 1.3948 2.31186 4.4379 -1.9153 3.3592 3.3592 1.1576 1.1576 1.1576 3.4165

11.23 10.82 11.08 10.95 14.29 -12.99 12.93 12.93 15.30 15.30 15.30 12.26

3.28 3.12 3.29 3.19 2.78 -4.05 3.98 3.98 3.52 3.52 3.52 1.25

3.13 4.83 -4.05 3.12 7.56 3.03 9.81 2.65 4.42 -1.02 3.51 8.72 3.35 5.64 3.35 5.64 -7.01 -7.01 -7.01 1.26 13.90

3 2 2 3 2 -4 3 3 3 3 3 1

0.3838

--

--

--

0.19

3

1.15276 1.63878 1.37547 -2.2112 1.3801 1.0231 1.0372

11.41 11.84 11.20 11.55 12.21 12.41 11.87 13.12

0.97 1.38 0.76 0.26 1.49 1.40 -1.88

1.34 1.73 1.11 0.43 1.81 1.70 -2.22

5.05 2183.47 2.22 332.79 11.03 23.71 100.18 177.93

---------

4.0979 45.55 11.16 10.50 10.76 3.3194 44.17 14.27 12.62 51.95 2.633 74.83 15.22 18.43 248.87 1.9866 45.33 9.96 7.87 111.59 1.8763 53.55 9.08 6.60 29.48 4.4382 50.41 11.74 9.34 67.25 2.01128 141.11 8.53 12.84 28.32 3.8358 51.62 12.82 13.56 315.61 2.5022 75.23 13.63 14.52 23.84 2.1324 51.84 12.52 9.12 54.42 3.8254 55.85 15.90 15.32 807.62 4.0921 34.20 13.71 13.40 310.93 2.8594 44.03 8.10 11.43 50.60 2.971 48.42 10.27 7.80 13.16 3.8318 83.35 15.31 15.50 184.49 5.8247 82.12 20.29 15.81 142.24 3.1416 116.96 24.26 19.88 498.82 7.706 58.89 16.85 10.43 116.49 1.719 39.53 6.91 8.00 71.03

2 3 5 2 1 2 2 3 3 2 5 5 3 2 4 4 5 4 2

3.39614 1.5271 5.5865 2.4589 1.3757 1.2923 2.8141 4.3249 1.7649

302.33 14.28 87.52 182.62 343.21 167.56 665.67 20.68 61.97

3 3 4 5 4 -5 1 3

1.76505 1.4953

49.74 4.87 9.07 1.52 53.53 6.96 11.05 71.89

---

1.9253

80.53 13.60

3.20794 4.00612 4.13067 3.126 14.2242 3.393 8.8055 3.996

53.26 47.23 46.27 42.34 60.10 58.76 61.71 44.66

NZ Insurance NZ Bonds Non-PIE Sovereign - Colonial Invstrbds - Fx Int

NZ OE Cash AMP AIT NZ Cash - UT35 AMP Capital NZ Cash Fund AMP PUT Select Cash ASB Cash Fund BT Enhanced Cash Fund Fisher Cashplus Fund Milford Cash Nikko AM NZ Cash

NZ OE Equity Region Australasia AMP AIT Australasian Shrs-Multi Mgr-UT07 BT PS Australasian Diversified Share Castle Point Ranger Fund Devon Alpha Fund Devon Dividend Yield Devon Trans-Tasman Fund Forte Equity Trust Harbour Australasian Equity Harbour Australasian Equity Focus Fund Harbour Australasian Equity Income Milford Trans-Tasman Equity Mint Australasian Equity Fd (Retail) Nikko AM Concentrated Equity OneAnswer SAC Equity Selection Pie Australasian Dividend Growth Pie Australasian Emerging Companies Pie Australasian Growth 2 Fund Pie Australasian Growth Fund QuayStreet Altum

NZ OE Equity Region Australia AMP Capital Australian Share Fund Devon Australian Fisher Funds Australian Growth Fund Fisher Funds Premium Australian Fund Milford Australian Absolute Growth Fund Milford Australian Equities Wholesale Milford Dynamic OneAnswer SAC Australian Share QuayStreet AU Equity

56.44 59.71 68.10 66.81 46.71 55.44 79.69 65.61 48.80

9.47 7.85 15.66 15.77 10.72 -15.18 3.27 5.78

8.42 7.18 12.33 12.42 --15.00 3.34 6.66

NZ OE Equity Region Emerging Markets AMP AIT Emerging Markets - UT65 AMP Capital Emerging Markets Share

NZ OE Equity Region Europe Pie Growth UK & Europe

--

106.93

--

14.51 13.23 12.63 13.11 17.50 17.90 15.22 13.89

46.36 494.22 3.23 3.17 297.19 243.08 77.75 80.47

4 4 3 3 5 5 3 4

NZ OE Equity Region NZ AMP Capital Ethical Leaders NZ Shares AMP Capital NZ Shares Fund AMP Prem PUT ACI NZ Shares AMP Prem PUT ACI NZ Shares Index Fisher Funds NZ Growth Fund Fisher Funds Premium New Zealand Fund Fisher Trans Tasman Equity Trust Forsyth Barr New Zealand Equities

17.27 15.28 14.80 14.74 20.19 20.80 18.88 14.18

Name Harbour NZ Equity Advanced Beta Fund Milford NZ Equities Wholesale Fund Nikko AM Core Equity OneAnswer SAC NZ Share QuayStreet NZ Equity Russell Investments NZ Shares Simplicity NZ Share Smartshares NZ Core Equity Trust

Latest 1Yr 3Yr 5Yr Size Morningstar Transaction Return Return Return $M Rating Exit price % Overall 2.1498 54.66 13.35 11.96 265.10 2 4.5013 47.95 17.94 18.06 816.59 5 2.922 41.14 11.32 13.22 39.35 3 6.8537 40.63 15.17 13.14 66.93 3 3.7054 39.74 14.68 14.16 159.09 4 2.211 44.50 14.91 13.14 274.87 3 1.4888 41.10 --- 607.09 -1.9186 58.66 13.99 13.28 149.71 2

NZ OE Equity Region World AMP Capital Core Global Shares Fund AMP Capital Global Companies AMP Prem PUT FD Intl Share Fund 1 Value AMP Prem PUT SSgA Global Shares Index Elevation Capital Global Shares Fund Fisher Funds Property and Infrastructure Milford Global Select Wholesale Fund OneAnswer SAC International Share Pie Global Growth QuayStreet International Equity Russell Investments Global Shares T.Rowe Price Global Equity Growth

2.0752 1.77533 1.972 2.83621 2.0724 3.3997 2.8551 3.2491 2.4143 2.6365 2.5385 2.7027

44.63 48.78 46.16 44.82 85.29 51.63 46.63 48.23 58.54 37.19 48.83 64.46

11.93 -12.76 14.26 14.37 14.38 17.67 14.12 14.86 11.04 11.23 20.23

11.49 -11.13 12.62 10.43 12.90 -13.61 14.83 10.54 12.00 18.83

829.13 76.75 4.04 2.90 22.33 161.51 1156.21 275.88 182.18 355.42 100.90 276.67

3 -2 3 1 4 4 4 5 2 2 5

62.24 27.96 58.56 69.23 62.48 36.18 57.55 69.42 59.79 64.87 69.05 67.86 60.65 53.88 83.20 46.93 44.91 69.49

9.42 7.04 12.29 9.13 10.83 9.18 10.70 11.32 10.06 11.30 19.08 19.67 13.49 13.63 13.61 12.31 9.75 9.68

10.84 6.65 -11.23 11.43 7.44 11.87 11.72 11.69 12.58 17.94 18.24 12.86 12.13 13.51 10.56 9.63 12.07

11.21 25.59 77.28 493.38 79.78 344.52 61.36 4.88 561.83 80.04 103.88 331.27 139.13 1098.49 41.75 37.69 1.04 99.18

2 2 3 2 3 1 4 3 3 4 5 5 3 4 3 3 2 3

41.65 9.10 42.67 7.14 35.30 5.62

5.70 1.50 4.65 222.78 3.52 336.69

4 3 2

2.85714 5.681 2.5704 4.6968

48.59 45.06 42.53 47.62

12.09 10.69 13.35 14.23

8.48 8.38 9.00 10.03

177.46 36.40 81.70 167.22

1 3 3 4

1.27503 2.12188 2.58949 1.08574 1.98892 2.4664 2.4107 1.1177 1.1032 1.282 1.3475 1.1933

12.67 11.87 12.90 14.39 12.59 17.26 15.71 15.76 22.00 17.17 10.60 17.66

1.58 2.41 3.10 2.02 3.16 3.41 3.17 3.71 4.71 4.76 3.59 4.10

1.75 1.60 2.73 2.08 2.07 3.12 2.99 3.49 -3.79 2.57 3.95

46.33 5.97 105.84 82.34 3.16 87.75 168.56 71.93 834.73 59.93 2.65 677.73

1 1 2 2 2 3 3 4 5 4 2 5

0.76959 1.1527 1.4484 1.8456

48.54 -0.91 2.70 89.93 26.21 2.10 2.57 4.07 ---- 19.48 56.29 5.55 6.46 51.39

-----

2.55135 1.84349 2.39784 3.62158 2.26106

44.70 45.80 40.74 53.73 45.19

8.70 9.71 8.11 10.53 9.07

8.93 9.93 8.22 10.07 9.27

63.68 7.64 25.59 10.54 19.43

1 3 1 2 2

1.60465 2.15788 2.41522 1.38225 1.19357 2.17499

33.48 24.39 38.91 26.12 31.96 32.67

7.31 4.88 8.24 3.28 7.69 6.77

7.28 4.71 7.52 4.54 6.78 6.67

34.44 47.51 70.06 91.11 166.27 38.24

2 1 3 1 2 1

NZ OE Equity Region World - Hedged AMP AIT Global Equities-Multi Mgr-UT28 AMP AIT Global Infrastructure - UT04 AMP Capital All Country Glb Shares Idx AMP Capital Core Hedged Global Shares Fd AMP Capital Ethical Leaders Global Shars AMP Capital Global Listed Infrastructure AMP Capital Global Shares Fund AMP Prem PUT SSgA Global Shares IndexHdg ASB World Shares BT PS International Diversified Share Fisher Funds International Growth Fund Fisher Funds Premium International Fund Fisher Global Fund Milford Global Equity Nikko AM Global Equity Hedged Pathfinder Global Water Pathfinder World Equity Fund Russell Investments Hedged Global Shares

1.66109 3.12473 1.3395 2.03728 2.28743 1.87342 3.94085 3.34656 2.1876 2.6108 3.5355 3.7265 8.0734 2.2396 2.7332 2.711 2.2823 2.6927

NZ OE Equity Sector Global - Real Estate AMP AIT Global Property - UT54 AMP Capital Global Propty Securities Fd OneAnswer SAC International Property

4.02496 1.71443 1.6175

NZ OE Equity Sector NZ - Real Estate AMP Australasian Property Index Fund BT Property Fund Mint Australia NZ Rl Estt Invm (Ret) OneAnswer SAC Property Securities

NZ OE Global Bond AMP AIT Fixed Interest Income - UT36 AMP AIT Global Bonds-Multi Mgr-UT13 AMP Capital Etcl Ldrs Hdgd Gbl Fxd Intst AMP Capital Global Short Duration AMP Prem PUT SSgA Global Fixed Int Index BT PS International Diversified Bond Fisher BondPlus Fund Fisher Funds Income Milford Global Corporate Bond Fund Nikko AM Global Bond OneAnswer SAC International Fixed Intrst Russell Investments Global Fixed Int

NZ OE Miscellaneous AMP Capital Commodities Nikko AM Income NZAM Global Growth Salt Long Short Fund

NZ OE Multisector - Aggressive AMP AIT Aggressive Portfolio - UT31 AMP AIT eInvest - Aggressive - MDF7 AMP AIT Growth Portfolio - UT03 AMP Capital Ethical Leaders Growth AMP PUT Select Growth

NZ OE Multisector - Balanced AMP AIT eInvest - Balanced - MDF5 AMP AIT Moderate Portfolio - UT01 AMP Capital Ethical Leaders Balanced AMP Capital Global Multi Asset Fund AMP Capital Income Generator Fund AMP PUT Select Balanced

Name ANZ Invmt Fds Balanced ASB Balanced Milford Balanced Fund OneAnswer MAC Balanced QuayStreet Balanced QuayStreet Socially Responsible Inv Westpac Active Balanced Trust

Latest 1Yr 3Yr 5Yr Size Morningstar Transaction Return Return Return $M Rating Exit price % Overall 2.2491 34.05 8.13 7.22 440.46 3 2.0321 34.62 7.78 7.88 470.93 3 2.8144 39.07 9.84 9.62 1293.17 5 2.2491 34.05 8.13 7.22 62.28 3 2.2296 29.42 7.40 7.23 280.11 3 2.1801 29.33 7.23 6.75 56.85 2 2.8168 35.75 8.04 7.69 587.96 3

NZ OE Multisector - Conservative AMP PUT Select Income ANZ Invmt Fds Conservative ASB Conservative Milford Conservative OneAnswer MAC Conservative QuayStreet Conservative QuayStreet Income Westpac Active Conservative Trust

1.7562 1.7719 1.8071 1.2352 1.7719 1.9684 1.2065 2.1321

10.35 20.65 18.49 23.30 20.65 20.75 20.82 20.53

1.81 5.22 4.26 5.91 5.22 5.07 4.74 4.33

1.82 4.39 4.20 6.27 4.39 5.11 4.94 4.10

1.73 74.87 154.27 552.92 22.40 121.58 285.29 295.96

1 3 2 5 3 3 4 3

2.39299 1.76419 2.5397 2.7968 2.0662 4.142 4.8078 2.5397 2.7968 4.0431 2.3751 2.8782

32.68 41.94 41.00 48.54 43.16 34.15 50.50 41.00 48.54 41.01 33.27 43.02

6.79 8.85 9.47 10.70 9.03 8.57 12.06 9.47 10.70 9.48 8.43 9.50

6.69 8.98 8.63 9.94 9.47 7.63 11.76 8.63 9.94 8.57 8.37 9.11

76.94 10.43 281.74 160.72 166.61 13.67 1580.83 48.65 38.78 55.41 294.94 131.97

1 2 3 4 3 2 5 3 4 3 2 3

1.36155 1.46142 2.71407 1.964 2.0029 1.8477 1.8912 1.0537 1.8685 1.1127 2.0029 1.7886

20.24 25.02 20.82 19.54 27.39 21.40 25.04 29.48 28.13 24.10 27.39 27.71

4.27 5.36 4.22 3.68 6.76 5.20 5.52 7.54 7.51 5.45 6.76 6.21

4.05 5.26 3.78 3.38 5.82 5.00 5.59 5.84 8.02 4.74 5.82 5.83

9.17 36.18 6.49 11.57 248.88 827.42 623.16 159.60 2529.97 262.56 25.36 984.53

2 3 2 1 4 3 3 4 5 2 4 3

1.92866 1.73792 1.29214 1.7261 1.4657 1.954 1.163 1.1256 1.1974 1.099 1.2479 1.9094 1.4323 1.2547 1.1143 1.275

10.51 11.89 14.42 14.32 11.73 15.42 13.17 14.77 16.56 13.72 15.90 12.85 16.09 12.61 9.05 14.96

2.81 3.41 2.77 3.21 4.10 3.66 3.34 3.92 4.47 4.17 4.43 3.92 3.32 3.32 -1.81

2.64 3.27 2.88 3.19 3.42 3.69 3.28 3.69 4.63 3.80 4.29 3.39 3.64 3.24 -2.10

15.42 1947.64 447.46 108.61 154.93 252.88 178.06 467.84 882.30 117.71 293.75 15.73 415.18 205.83 404.56 4.80

2 4 2 3 3 4 3 4 5 4 5 3 3 3 -1

NZ OE Multisector - Growth AMP AIT Balanced Portfolio - UT 02 AMP AIT eInvest - Growth - MDF6 ANZ Invmt Fds Balanced Growth ANZ Invmt Fds Growth ASB Growth Fisher Multi Sector Fund Milford Active Growth OneAnswer MAC Balanced Growth OneAnswer MAC Growth OneAnswer SAC Balanced Growth QuayStreet Growth Westpac Active Growth Trust

NZ OE Multisector - Moderate AMP AIT eInvest - Conservative - MDF2 AMP AIT eInvest - Moderate - MDf3 AMP Capital Ethical Leaders Conservative AMP PUT Select Conservative ANZ Invmt Fds Conservative Balanced ASB Conservative Plus ASB Moderate Harbour Income Milford Diversified Income Fund Mint Diversified Income OneAnswer MAC Conservative Balanced Westpac Active Moderate Trust

NZ OE NZ Bonds AMP AIT NZ Fixed Interest - UT60 AMP Capital NZ Fixed Interest Fund AMP Capital NZ Short Duration BT Corporate Bond Fund Fisher New Zealand Fixed Inc Trust Forsyth Barr New Zealand Fixed Interest Harbour NZ Core Fixed Interest Harbour NZ Corporate Bond Milford Trans-Tasman Bond Nikko AM NZ Bond Nikko AM NZ Corporate Bond OneAnswer SAC NZ Fixed Interest QuayStreet Fixed Interest Russell Investments NZ Fixed Interest Simplicity NZ Bond Westpac Active Income Strategies Trust

Returns are calculated to 31/03/21. Returns are calculated before tax after fees, except for the non-PIE categories, which are after tax and after fees. For more information about this table and the methodology behind the data, contact: helpdesk.nz@morningstar.com or go to www.morningstar.com.au © 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. To the extent that any of this information constitutes advice, it is general advice and has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Limited (subsidiaries of Morningstar, Inc.) without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement (in respect of Australian products) or Investment Statement (in respect of New Zealand products) before making any decision to invest. Neither Morningstar, nor Morningstar’s subsidiaries, nor Morningstar’s employees can provide you with personalised financial advice. To obtain advice tailored to your particular circumstances, please contact a professional financial adviser. Please refer to our Financial Services Guide (FSG) for more information www.morningstar.com.au/fsg.asp

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