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 JUNO Kiwisaver Scheme's own website, fund updates, and the product disclosure statement published in November 2020.
Facts & History of the KiwiSaver provider
JUNO KiwiSaver Scheme was launched by Pie Funds Management in 2018. Pie Funds is a boutique investment manager who has generated wealth for clients since 2007. The philosophy of Pie Funds is to outperform the markets by investing in growth companies.
The JUNO KiwiSaver Scheme manages three funds and has total Assets Under Management (AUM) of $107,106,717.32 as per the annual fund report of July 2020.
The investment team, structure and their alignment with clients
Mike Taylor - Executive Director & CEO
Mike is the Founder and CEO of Pie Funds and the JUNO KiwiSaver Scheme. He is also Portfolio Manager of the JUNO KiwiSaver Conservative Fund and the JUNO KiwiSaver Balanced Fund.
Mike started Pie Funds in 2007 because he believed most banks and fund managers were serial underperformers, and he thought there was a better way to manage money. He bought his first shares at the age of 18. He went on to grow his own personal portfolio and then that of friends and family, before starting Pie Funds 10 years later. Mike then launched the JUNO KiwiSaver Scheme in 2018, because he believed JUNO could make a difference to Kiwis’ lives through its one, low, fixed fee, active management, and investor education.
Mike has a Bachelor of Business Studies in Finance from Massey University and an NZX Diploma.
Chris Bainbridge - Head of Australian Equities & Portfolio Manager
Chris is responsible for researching and conducting detailed analysis of Australian companies. He is also the Portfolio Manager for the Growth 2 Fund, and Co-Portfolio Manager with Mark Devich of the Emerging Fund.
Prior to joining Pie in 2012, Chris worked at Freshfields Bruckhaus Deringer LLP in London as a Lawyer in the Banking and Finance divisions.
Chris holds a Bachelor of Arts and Laws from the University of Auckland in New Zealand. He is also a Chartered Financial Analyst.
Mark Devich - Chief Investment Officer
Mark is Chief Investment Officer focusing on investment decisions and ensuring Pie’s investment strategy continues to be implemented successfully. He is also the Portfolio Manager of the JUNO KiwiSaver Growth Fund.
Prior to joining Pie Funds in 2010, Mark worked at PricewaterhouseCoopers in both the Financial Assurance and M&A taxation divisions.
Mark has a Commerce and Law degree from the University of Auckland, is a CFA charter holder and a qualified chartered accountant.
Doug Jopling - Senior Investment Analyst & Portfolio Manager
Doug is responsible for researching and conducting detailed analysis across multiple investment strategies. He is also the Portfolio Manager of the Growth Fund.
Prior to joining Pie in 2018, Doug worked at IMS Payroll as its CEO. Previously, Doug has been CFO for Farmlands, IKEA Australia and Virgin Active Australia.
Doug holds a Bachelor of Science. He is also a Chartered Accountant.
The Manager of the Scheme is Pie Funds Management Limited (“Pie Funds”), who is also the investment manager of the Scheme. The investment team at Pie Funds is made up of a four-person executive team (listed in the previous section), responsible for the oversight and portfolio management of specific funds. In regards to the key personnel involved with the management of the Juno Growth fund, Mark Devich is responsible for the portfolio management of the fund, with one year and six months experience with this fund.
Pie Funds has delegated the performance of certain administration management functions for the Scheme (including registry) to MMC Limited (MMC). Pie Funds and MMC are reimbursed from the Scheme’s assets for the day-to-day administration of members’ balances and for maintaining the member register for the Scheme.
Conflicts of Interest Policy
Pie Funds has in place a Conflicts of Interests Policy relating to conflicts of interest between Pie Funds (or individual staff) and investors’ interests (the ‘Conflicts Policy’). The statutory duties under the FMCA set out above have been built into the Conflicts Policy.
The purpose of the Conflicts Policy is to allow conflicts of interest to be proactively and quickly identified and managed in a manner that is fair to investors. The Conflicts Policy is intended to facilitate Pie Funds’ directors and employees to recognise, disclose and manage conflicts between Pie Funds (or individual staff) and investors, and the Conflicts Policy sets out a procedure to manage and resolve potential or apparent conflicts in a way that is fair to investors.
Below is a link for more information about their Kiwisaver Scheme:
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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.
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 of the Scheme is Trustees Executors Limited (the ‘Supervisor’). The Supervisor is responsible for monitoring JUNO’s compliance in accordance with the Governing Document and the Financial Markets Conduct Act 2013 (‘FMCA’). The supervisor is also responsible for supervising the Fund under the Financial Markets Conduct Act 2013 and responsible for supervising Pie Funds as manager of the Scheme.
The Supervisor is required by law to vest the investments and other property of the Scheme in the name of the Supervisor or its nominee. It has delegated certain custodian duties to MMC Limited. A current list of the directors of the Supervisor is available online at companiesoffice.govt.nz/companies. The directors of the Supervisor may change from time to time without notice to you. The Supervisor is licenced under section 16(1) of the Financial Markets Supervisors Act 2011 to act as a supervisor in respect of managed investment schemes. Details of the licence are available on the Financial Markets Authority website, www.fma.govt.nz and on the Financial Service Providers Register website, companiesoffice.govt.nz/fsp.
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.
JUNO’s custodian is MMC Limited.
The Manager is a New Zealand owned and operated KiwiSaver specialist. The principal purpose of the JUNO KiwiSaver scheme is to provide retirement benefits to Members in accordance with the KiwiSaver Act and the Financial Markets Conduct Act 2013 (FMCA). The Scheme is structured so that each fund is established as a separate trust, governed by a trust deed which appointed Pie Funds as manager and Trustees Executors Limited as supervisor.
The Manager’s general philosophy states that as an active manager, skilled active investing delivers better long-term results especially in combination with low fees. The manager has an Investment Team (IT) which is made up of experienced investment professionals. The Investment Team is responsible for reviewing the funds and does so by monitoring news and price movements for companies invested in to check whether it affects their views on the companies. Further, the IT also reviews the performance of the funds on a monthly and annual basis.
The Manager also runs internal spreadsheets daily to ensure consistency, and regularly reviews the target investment mix, rebalancing when needed.
An Investment Committee (IC) also regularly performs a risk assessment, including a review of liquidity, market and currency risk. The IC monitors compliance with the SIPO as well.
The Scheme is a managed investment scheme under the Financial Markets Conduct Act 2013. The Scheme is governed by a Governing Document between Pie Funds and Trustees Executors Limited (‘Supervisor’). Each Fund is established as a separate trust within the Scheme.
Follow the link below to the Statement of Investment Policy and Objectives:
The investment processes followed by the manager
JUNO believes that the market often values or prices assets incorrectly and this provides opportunities. To take advantage, their Funds use an active investment strategy to help deliver the best long-term results to Members. Generally, this means buying assets when they are cheap and selling them when they are expensive. They believe that with their active investment approach, they can achieve above-average returns for their investors.
Active Management – They are an active manager and believe that skilled, active investing can deliver better long-term results in conjunction with their low fees.
Asset Research – They research the assets they invest in to determine:
Key Competencies in Active Equities – JUNO is a high conviction manager, thus, they look for a relatively small number of companies they believe are mispriced, relative to the companies potential outlook. Therefore, they assume that the companies they choose:
Engagement with external organisations – Where they do not have key competencies in areas they believe will benefit investors, they will engage with other organisations - for example research providers - that can provide the information they need.
Competent management of Environment, Social and Governance (‘ESG’) – They believe that ESG matters and positively contributes to the long-term value of companies. Therefore, they integrate ESG into their investment process.
Transparency – They believe that communicating as clearly and as simply as possible to their stakeholders is the best way going forward. As such, they communicate about:
JUNO’s investment process relies on research of two kinds:
Their investment process for investing in individual companies:
The Investment Team reviews the Funds in several ways:
Additionally, the Investment Committee does regular, detailed reviews of each Fund. This includes a risk assessment which considers liquidity, stock market and currency risk, the weightings of each position, the overall composition of the Funds and the Funds’ overall compliance with their SIPO.
For more information please see link below:
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.
Investing in a way that incorporates Environmental, Social and Governance (ESG) issues, manages risk and generates sustainable long-term returns is an important consideration in JUNO’s investment decision making process. JUNO believes that proactively managing ESG issues will deliver stronger long-term investment returns.
JUNO acknowledges that choosing the right KiwiSaver scheme, for most New Zealanders, can be a challenge. Because of this implication, JUNO commits to communicating information in the clearest and simplest ways possible.
As per the JUNO ESG document, across all JUNO funds, including their KiwiSaver funds, investments into companies involved in the following activities are excluded:
Additionally, JUNO will weight all investments in funds towards companies and Exchange Traded Funds (ETFs) with lower carbon emissions and smaller fossil fuel reserves.
JUNO may also decide to exclude companies, if we believe their activities – what they do, how they do it, or both – is against the ESG policy or otherwise poses undue ESG risk.
Corporate Governance & Proxy Voting
The following roles are responsible for the execution, management and oversight of the Responsible Investment Policy:
The JUNO Responsible Investment Policy will be reviewed annually or more regularly as required. During this review, the persons responsible will consider developments in responsible investing practices. This policy is subject to change at any time.
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?
More details on each of these funds can be found in the PDS.