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AMP KiwiSaver Scheme Details

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.

What questions are important to Investors?

Note: The following information is taken from AMP Kiwisaver Scheme's own website, fund updates, and the product disclosure statement published in October 2020.

Who is AMP?

Facts & History of the KiwiSaver provider

History

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:

 

History

 

Size

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.

 

Who are the people looking after my money?

The investment team, structure and their alignment with clients

The Investment team

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.

How is the Investment Team Structured?

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?

 

Incentives/Alignment

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 

How do I know my money is safe?

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.

AMP's Supervisor & Custodian 

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:

  • Supervising the performance by the Manager of its functions and its issuer obligations.
  • Supervising the financial position of the Manager and the Scheme to ascertain that it is adequate.
  • Acting on behalf of the investors in relation to the Manager;
  • Reporting to the FMA any contravention or likely contravention of the Manager of an issuer obligation.
  • Holding the Scheme’s property, or ensuring that it is held, in accordance with the FMCA.

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:

 

The New Zealand Guardian Trust 

 

AMP’s Governance Process

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. 


To date, this investment has been split across approximately 30 initiatives with five key underlying focus areas:

  1. Better Customer Outcomes: Focus on delivering initiatives across the business that carry risk and controls benefits to promote better customer outcomes. Some key initiatives included: Customer Complaints Framework; Advice Business Review Program; and Trustee Member First.
  2. Governance and Three Lines of Defence: Establish clearly defined responsibilities and accountabilities across the three lines for the governance of risks, with initiatives emphasising Line 1 implementation.
  3. People and Culture: Establish a culture where people, behaviours and remuneration are aligned to achieve optimal risk management outcomes, with projects including: Simplifying Governance and Entities; Conduct Management and Conflicts of Interest.
  4. Internal Control Environment: Strengthening of risks and controls, with key initiatives uplifting Financial Crime Compliance and Compliance and Operational Risk and Controls.
  5. Systems and Data: Uplift systems and data management infrastructure to support strategic risk initiatives and effective control, with major programs being delivered for the Governance Risk and Compliance System.


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 :

 

Corporate Governance Statement (Page 11-12)  

 

How do they decide where to invest?

The investment processes followed by the manager

AMP's Investment Belief


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.

Investment Process

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 Monitoring

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

 
Hedging may be used within each of the funds, or underlying funds, to manage the exposure of assets to exchange rate fluctuations. A hedged position will not produce the full benefit of a favourable exchange rate movement, but at the same time will not expose the fund to the full loss potential of an unfavourable exchange rate movement. A fund which incorporates a currency hedge provides a buffer against currency fluctuations either in whole, or in part. 
 
For each of the Funds with foreign currency exposure (with the exception of the AMP International Shares Fund and the AMP Passive International Shares Fund) the Manager has adopted a currency hedging policy and monitoring process  that is implemented within the underlying funds by the underlying fund managers and not directly within the Funds.
 
 To ensure that the underlying fund managers comply with the currency hedging policy and monitoring process the Manager will obtain on a quarterly basis a compliance certificate confirming that the policy has been adhered to in accordance with the relevant investment management agreement.
 
For further information,  please see the link below:

Does AMP Invest responsibly?

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.

AMP’s Responsible Investment Policy & Ethical Exclusions

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:

  • Cluster munitions
  • Anti-personnel mines 
  • Chemical weapons
  • Nuclear explosive devices. 
In addition, The Manager prohibits AMP Capital and any external fund managers from direct investment in Excluded Securities as listed in above. The Manager utilises the NZ Superannuation Fund Exclusion List as the minimum standard for identifying Excluded Securities as listed above.

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:

 

AMP Ethical Balanced Fund Update

 

Economic, Environmental and Social Sustainability Risks

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:

  • Fee reductions across the North and MyNorth platforms.
  • Enhanced digital functionality to provide whole of wealth solutions to create value for customers.
  • Further progress on customer remediation.
  • Constructive engagement on the policy and regulatory reform in the financial services industry.
  • Continued investment in the development and training of our employees and advisers
  • Enhanced mental health and wellbeing support.
They also acknowledge ethical issues and climate change relating to their investments and the impacts of their operations and supply chains.

AMP Capital continues to provide thought leadership in responsible investment, while they remain carbon neutral across their own operational footprint. Through the AMP Foundation, they also support employee volunteering and provide direct support to charities and social enterprises.

For more information about their Risk Management Framework, please see the link below:

 

Corporate Governance Statement (Page 10 -12)

 

 

How do AMP compare to others?

Best Performing KiwiSaver Funds

FUND TYPE
FUND NAME
5YR AVERAGE
Conservative
Milford
Conservative
6.3%
Moderate
Aon Russell
Lifepoints
7.3%
Balanced
Milford
Balanced
9.1%
Growth
Milford Active
Growth
10.7%
Aggressive
Booster
GearedGrowth
12.4%

*Past performance is not necessarily indicative of future performance.

*All returns are after fees and before tax, updated 30th September 2020.

*Source: MorningStar Fund Report September 2020

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Look at more than just fees and past performance

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:

  • How and where is my money invested? 

  • What is the level of volatility (risk) of this fund? Does it align with my volatility tolerance and capacity?

  • How do the fees compare to other funds with a similar rate of return?

  • What are the providers processes when selecting investments and making changes in the funds?

Our research team at National Capital looks at over 100+ funds and can recommend the right KiwiSaver investment for you. 

Why get advice from National Capital?

  • Detailed Research: We research various factors of KiwiSaver funds – from asset allocation all the way to ethical investing.

  • Answers: How do I know my money is safe? What risks are being taken?

  • Monitoring: We’re constantly monitoring the KiwiSaver landscape.

  • Expertise: Our team specialise in Investment and KiwiSaver research.

  • No cost to you: We get paid by the KiwiSaver providers

  • Gift of Time: We do the hard work, so you can focus on life.

Our KiwiSaver recommendations look at the big picture and not just the scorecard. So, what are you waiting for?

List of AMP KiwiSaver Funds

AMP KiwiSaver Plan has the following KiwiSaver Funds. More details on each of these funds can be found in the links below.