There's a lot more to selecting a KiwiSaver fund than just checking past returns and fees. If your hard-earned money is invested in KiwiSaver, you need to ask the important questions to understand where and how that money is invested.
Note: The following information is taken from AMP Kiwisaver Scheme's own website, fund updates, and the product disclosure statement published in October 2020.
Facts & History of the KiwiSaver provider
AMP Capital and AMP Wealth Management are part of the AMP Group. They share a heritage that spans almost 170 years. They started back in 1849 as the investment management arm of AMP Group.
AMP Capital has more than 250 investment professionals in 19 locations around the world and operates across all major asset classes - with a particular focus on real estate and infrastructure.
✅ New Zealand Based Provider
Below you will find a link for more information on their history:
Total Assets Under Management in their KiwiSaver scheme (AUM) is $5.4 billion and 220,257 Kiwisaver members as of March 2020. As of Feb 2020, AMP is the fourth largest KiwiSaver provider.
The investment team, structure and their alignment with clients
Timothy Pritchard - General Counsel, AMP Wealth Management
Timothy is an experienced lawyer who has been practising for nearly 20 years, the last 14 of which have been in, in-house roles.
He has worked in both England and New Zealand and has held leadership roles since 2004, culminating in his current role as General Counsel at AMP Financial Services New Zealand.
Blair Robert Vernon - Chief Executive, AMP Wealth Management
Blair joined AMP in 2009 and was appointed to Chief Executive, New Zealand wealth management in March 2019. He is responsible for leading AMP’s New Zealand advice and wealth operations.
He was previously Managing Director, AMP New Zealand. Prior to this role, Blair was AMP’s Director Retail Financial Services (NZ), responsible for sales, customer service, marketing and supporting AMP’s extensive Adviser business networks including Spicers and AdviceFirst. Blair has over 25 years’ experience across the Financial Services sector in New Zealand and Australia.
Jeffery Darren Ruscoe - Chief Client Officer, AMP Wealth Management
Jeff is the acting Chief Client Officer where he is responsible for the following :
The leadership of the AMP product suite across KiwiSaver, Investments, Life Insurance and General Insurance to deliver profitability and competitiveness.
Jeff has over 15 years of experience across the Financial Services sector in New Zealand, with AMP. He was previously General Manager of Product & Marketing, for 2 years and Chief Customer Officer for 3 years.
Dhaya Sivakumar - Chief Operating Officer
Dhaya is an experienced leader, having held senior management roles across a number of industries, including travel, tourism, telecommunications, financial services and health care. Dhaya leads AMP’s IT and customer service teams in delivering information technology and customer service solutions to support AMP’s people and customers through digital innovation and transformation.
The manager of the Scheme is AMP Wealth Management New Zealand Limited (Manager). The Manager makes investment decisions for the Scheme in its role as manager, acting through its Investment Committee. The Investment Committee is also a responsible oversight body for approving and ensuring adherence to AMP Statement of Investment Policy and Objective (SIPO). The Investment Committee meets regularly and senior members of the Investment and Business teams, attend the Investment Committee.
The Scheme does not have a separate investment manager. However, the assets of the Funds are generally invested in underlying investment funds (underlying funds). Fund management services for the underlying funds are performed by each of those underlying funds’ fund managers (underlying fund managers) and not by AMP. AMP Capital Investors (NewZealand) Limited, one of the underlying fund managers to which the Scheme currently has a significant exposure, is a related party of the manager’s. AMP has made the decision that AMP Capital Investors (New Zealand) Limited will no longer be the underlying fund manager for the majority of the AMP-named Funds in the Scheme. AMP have decided to appoint BlackRock Investment Management(Australia) Limited to provide investment management services in relation to those Funds, subject to certain conditions being met. Provided the conditions are met, we expect to effect this change in the first half of 2021 and will communicate accordingly.
The Manager determines the investment strategy, objectives and policy of each Fund and sets the benchmark asset allocations (BAAs) and ranges that reflect that strategy, objectives and policy.
The Manager then selects one or more underlying funds and underlying fund managers that have adopted strategies, objectives and policies (including BAAs and ranges) that provide the exposure required for the Funds. Where the investment strategy, objectives and policy (including BAAs and ranges) of an underlying fund manager are varied and cease to provide the required exposure, the Manager will determine whether to vary the investment strategy, objectives and policy adopted in respect of the affected Fund or Funds or to vary the underlying investment to maintain the existing investment strategy, objectives and policy adopted in respect of the affected Fund or Funds.
For more information on the Investment Team Structure, please see the link below:
|Who is Involved?|
AMP as the manager of the Scheme is entitled to charge a fee not exceeding 2% per annum (plus GST where applicable) of the relevant Fund’s net asset value for providing its services to the Scheme. The management fee is also used to pay for the investment management services of AMP Capital for managing the underlying funds in which the assets of the Funds are invested. However, we are entitled to be reimbursed from the Funds for any performance fee charged by an underlying fund manager that is not related to us where that expense is passed on to us.
The management fee is calculated daily as a percentage of the value of your investment in each Fund. It is deducted from each Fund and reflected in the value of your units.
Below is a link to their incentives and fees in full:
|Incentives and Fees|
Governance & Compliance processes
All KiwiSaver Scheme Providers must ensure they meet regulatory standards and act with customer interests in mind.
KiwiSaver Scheme Managers must exercise care, diligence, and skill in the investment of scheme assets, and act in accordance with the stated investment policy and objectives. The FMA monitors that KiwiSaver Schemes are compliant with their obligations. Additionally, KiwiSaver Scheme Trustees also have a responsibility as front-line supervisors for monitoring the management and administration of these schemes.
The Supervisor and Custodian of the Scheme is the The New Zealand Guardian Trust Company Limited. A supervisor is a licensed entity independent of a KiwiSaver scheme provider that supervises the provider’s management of the scheme. KiwiSaver schemes are trusts, and (except for restricted KiwiSaver schemes) the terms of the trust deed states that the supervisor (or another custodian) must hold all contributions and investments in trust for the investors.
The Supervisor is responsible for the following functions:
The Supervisor may also appoint agents and delegate certain functions, including a custodian for the Scheme (with their approval). A custodian plays a key role in protecting your investments. They hold your money and investments (i.e. keep custody of them) on your behalf. So they are the legal holder of your assets while you are the beneficial and ultimate owner.
The Guardian Trust is the corporate trustee for many of New Zealand's leading corporations, financial institutions, fund managers and banks. Their clients span a broad range of business activities and the quality of their client portfolio reflects their status as a provider of corporate trustee services in New Zealand. As of June 2018, they manage funds in excess of NZ$ 120 billion.
Below you will find a link to a more detailed look into the Guardian trust:
In 2018, AMP committed to strengthen the risk management, internal controls and governance across the business over a two-year period ($100 million pre-tax investment) through a number of initiatives under the Enterprise Risk Management Strengthen Risk Management, Internal Controls and Governance Work Plan. Since the second half of 2018, AMP has invested approximately 65% of this $100 million for projects in the Advice, Bank, Wealth Management, Operations and Enterprise Risk Management.
According to AMP, good progress has been made in these key focus areas throughout 2019. This work will continue into 2020, along with business as usual improvements, to deliver a strengthened risk management, internal controls and governance position for AMP.
For more information about their Corporate Governance, please see the link below :
The investment processes followed by the manager
The Manager seeks to provide investors with a range of investment choices and investment management styles to enable them to tailor a portfolio that suits their unique goals and needs. The Manager does this by investing the Funds within the Scheme into a range of underlying collective investment schemes (underlying funds), choosing the investment products and underlying fund managers to provide a broad selection of Funds for investors to choose from
The Manager’s general investment approach is to identify various manager skills and styles and appoint a variety of underlying fund managers to provide a range of investment philosophies and styles. The investment philosophies and styles of the underlying fund managers are taken into consideration when determining whether to appoint or remove an underlying fund manager.
The Manager oversees the development, implementation, monitoring and performance of the investment strategy of the Funds within the Scheme, including appointing and removing the underlying fund manager(s).
The Manager and AMP Capital are parties to an agreement affecting the investment management decisions made in respect of certain AMP Group Products including the Kiwisaver Scheme. The Scheme invests in a range of wholesale and retail diversified and single sector funds. The Manager may seek advice and recommendations from AMP Capital and may consult about matters concerning the AMP Capital underlying funds into which the relevant Funds invest.
The Investment Committee also utilise investment research and other tools to provide recommendations on the underlying fund managers, where applicable. The Investment Committee monitors and reviews the investment performance, investment options and compliance with contractual arrangements of the underlying fund managers quarterly.
The review is based on the reports submitted by the underlying fund managers. Benchmark Asset Allocations are reviewed from time to time and at least annually by the Investment Committee.
Investment performance for the Scheme is monitored and reviewed monthly by the Investment Committee. Performance of the Funds is monitored over various periods (gross of tax and fees).
Performance is measured on an absolute return basis as well as relative to each Fund’s benchmark indices and its performance objective. In monitoring investment performance,the Investment Committee considers the reports submitted to them by the underlying fund managers for the underlying funds. Attribution analysis is also provided by the underlying fund managers where the fund is actively managed.
Currency Hedging Policy and Monitoring
Social and Ethical Considerations
Socially responsible investing (SRI) or Environmental, Social and Governance investing (ESG), also known as sustainable, socially conscious, “green” or ethical investing, is any investment strategy which seeks to consider both financial return and social/environmental good to bring about social change regarded as positive by society.
Basically, SRI investing is investing in companies that have a positive impact on society, based on a number of factors.
The Scheme takes into account certain environmental, social and governance (ESG) considerations when investing. At present, the application of this results in the negative screening of certain investments.
Specifically, the Scheme will not hold direct investments in entities that manufacture:
Where an underlying fund manager, appointed by a related party fund manager or an external fund manager, cannot invest consistently with this policy, the Manager will, among other things, consider the extent to which the relevant fund(s) can invest in Excluded Securities and will seek engagement with the relevant fund manager, where possible, to influence their own investment policy.
In addition to the above policy, the Scheme offers the AMP Ethical Balanced Fund whose updates are detailed in the link below:
They are committed to managing business sustainably for today and for the future, by creating long-term value for their clients, shareholders, employees, the community and the environment.
Their approach to sustainability is built around three connected areas of stakeholder focus, being their clients, people and communities. Their ongoing commitment and progress to managing business sustainably saw:
For more information about their Risk Management Framework, please see the link below:
We have looked at the best performing KiwiSaver funds based on their 5-year returns, however, looking at past performance of a fund is just one aspect when choosing a KiwiSaver fund. Other questions you should be asking include:
Our research team at National Capital looks at over 100+ funds and can recommend the right KiwiSaver investment for you.
Our KiwiSaver recommendations look at the big picture and not just the scorecard. So, what are you waiting for?
AMP KiwiSaver Plan has the following KiwiSaver Funds. More details on each of these funds can be found in the links below.