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 Nikko Kiwisaver Scheme's own website, fund updates, and the product disclosure statement published in May 2020.
Facts & History of the KiwiSaver provider
Nikko actively manages over NZD$6.6 billion of investments. They manage domestic assets through Auckland-based investment teams and employ carefully selected offshore managers to manage global assets. Their history dates back to 1994 when Norwich Union Fund Management was founded in New Zealand.
Nikko Asset Management (parent company) is one of Asia’s largest asset managers, providing high-conviction, active fund management across a range of Equity, Fixed Income and Multi-Asset strategies. In addition, their complementary range of passive strategies covers more than 20 indices and includes some of Asia’s largest exchange-traded funds (ETFs).
✅ New Zealand Based Provider
For more information, please see the History page below:
The Nikko AM KiwiSaver Scheme manages six funds and has a total KiwiSaver Assets Under Management (AUM) of over $NZ 7.3 million and 77 KiwiSaver clients.
The investment team, structure and their alignment with clients
Junichi Sayato - Executive Chairman & Co-CEO
Junichi Sayato joined Nikko Asset Management Co., Ltd. as Representative Director and Executive Deputy President in June 2015, and assumed his current position in April 2019. He mainly oversees corporate and supporting functions. He is also in charge of asset management along with Hideo Abe, President & Co-CEO.
Before joining Nikko Asset Management, Junichi Sayato most recently served as Representative Director and President of Sumitomo Mitsui Trust General Service Co., Ltd. He previously held the position of President at Sumitomo Mitsui Trust Research Institute Co., Ltd., and also oversaw IR at Sumitomo Mitsui Trust Holdings, Inc. as Director and Managing Executive Officer. At the former Sumitomo Trust & Banking Co., Ltd. (now Sumitomo Mitsui Trust Bank, Ltd.), he oversaw finance, ALM, operations, IT, compliance, and CS as Director and Managing Executive Officer. Before that, he served as Executive Officer and Regional Executive for the Americas at the same bank, as well as General Manager of the New York Branch and General Manager of the Risk Management Department.
He has over 13 years of extensive experience in working outside of Japan, namely in London, New York and Washington D.C.
He graduated from the School of Law at Kyoto University in March 1978 and received his Master's degree from the London School of Economics (Department of Economics, International Relations Major) in August 1982.
Hideo Abe - President & Co-CEO
Hideo Abe joined Nikko Asset Management Co., Ltd. as Executive Vice Chairman in October 2013. He was also named Director in April 2014, and assumed his current position in April 2019.
Mr. Abe was most recently at Mizuho Securities Co., Ltd., where he served as director and deputy president for five years from 2008 to 2013. Prior to Mizuho Securities, he was a board member and CEO at Nikko Citigroup for four years.
During the course of his career at Nikko Cordial Securities and its forerunner company, Nikko Securities (now SMBC Nikko Securities), he held various important offices such as senior managing director for Nikko Cordial Securities, as well as being a board member and executive officer for Nikko Cordial Group. In these roles, he was a leader in business and product planning, marketing, fixed income trading and capital markets. Mr. Abe is a veteran financier who has been in the industry since 1977. From 1987 to 1995, he was assigned to the London-based Nikko Europe.
He is a graduate of Keio University’s School of Literature.
Yuji Ooyagi - Executive Vice President
Yuji Ooyagi has held the position of Executive Vice President since May 2019. He is in charge of Japan Sales, and oversees both the Japan Retail and Japan Institutional Business.
Ooyagi originally became Head of the Corporate Business Development Department in 2002, during which time he expanded Nikko Asset Management’s offering of products for financial institutions. He became the Head of Investment Trust Sales in 2010, where he held several important posts in support of the investment trust business. Ooyagi became Head of the Japan Retail Business Division and a Senior Corporate Managing Director in April 2014.
Ooyagi started at Nikko Securities (currently SMBC Nikko Securities) in 1985 before becoming a portfolio manager in 1992 at Nikko Securities Investment Trust and Management (currently Nikko Asset Management).
He graduated from Waseda University in March 1985.
Hiroki Tsujimura - Executive Vice President, Global Head of Investment and CIO
Hiroki Tsujimura has held the position of Executive Vice President, Global Head of Investment and CIO since June 2019, and is responsible for overseeing all investment management activities globally.
Tsujimura joined Nikko Asset Management in December 2004 as the firm's Global Head of Alternative Investments and Chief Investment Officer at its New York subsidiary. After relocating to Nikko Asset Management’s Tokyo headquarters in August 2010, Tsujimura served as Head of Active Investments, where he was in charge of equity, fixed income and alternative investments. He was appointed Chief Investment Officer – Japan in January 2013 and was also named Senior Corporate Managing Director in April 2014. He was named Executive Vice President in May 2019.
Before joining the firm, Tsujimura spent 12 years in the investment and financial industry in the U.S., where he worked in alternative investments serving as Director and Executive Vice President at Nikko Securities International (NSI). He also started NSI’s proprietary trading operation in his role as the head of the equity trading department. At Nikko Securities (now SMBC Nikko Securities) in Japan, Tsujimura established a joint venture with an American securities firm, where he served as Executive Vice President and Chief Operating Officer.
He earned his Bachelor’s degree from the Faculty of Business and Commerce at Keio University.
Nikko provides investment management services for domestic assets through their Auckland-based investment team. As Manager of the Wholesale Funds they have contracted an external investment manager to manage the underlying assets for the Nikko AM Wholesale Global Bond Fund. They appointed the external investment manager after a market search and selection process.
Nikko’s Investment Committee has responsibility for the delegation of investment management to specialist offshore managers. Appointment of an external manager will be noted in the investment strategy of each Fund.
The search and selection process of external managers involves an evaluation with emphasis on:
The Investment Committee monitors each delegated manager’s investment performance. This includes portfolio investment return and risk assessment relative to performance objectives and review of market commentary and portfolio activity.
Nikko operates within a strong governance framework and considers their fiduciary responsibilities of utmost importance. Nikko AM provides global resources, delivering systems, policies and procedures, while the New Zealand business is overseen by an experienced Board, Investment Committee and Compliance, Risk & Disclosure Committee.
They have created a compliance program to manage conflicts of interest and conduct which is continually updated to reflect the developing regulatory and compliance landscape.
In addition to their Compliance Programme, Nikko has adopted, and fully endorsed, the Nikko AM “Code of Ethics and Business Standards” (the “Code”). All Nikko AM NZ employees have signed acceptance of Nikko AM’s ethics and business standards as outlined in the Code and are required to reaffirm this acceptance annually.
For more information, follow the link below to download the Statement of Investment Policy and Objectives:
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 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.
Nikko’s supervisor is Public Trust. Corporate Trustee Services are part of Public Trust and are a leading specialist corporate trustee company in New Zealand, with more than NZ$90 billion under trusteeship and supervision. They are New Zealand's sole Crown-owned trustee company.
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.
Nikko’s custodian is BNP Paribas Fund Services Australasia Pty Limited. Appointed by the Supervisor to hold all of the assets of the funds on trust on behalf of the members.
For more information, please follow the link below to Nikko’s Product Disclosure Statement:
Performance is monitored daily by us and measured independently by BNP Paribas monthly.
Each Fund’s performance is summarised and tabled for discussion and comment at our Investment Committee meetings, held quarterly. Each measurement period (last three months, last year, last three years, last five years) includes the actual Fund performance, the agreed benchmark performance, and the excess return over benchmark, and volatility in the instance of the last five years measurement.
Investment performance objectives are set as an acceptable margin of absolute performance above recognised capital markets indices. Progress towards achieving investment performance objectives is generally measured over a rolling three year period before fees, expenses and taxes.
Currency Management & Hedging
Each Fund has different parameters regarding the ability to hold assets denominated in foreign currency. Any requirement or permission to hedge foreign currency exposure back to New Zealand Dollars has been defined within the investment strategy for each of Nikko’s Funds.
The Currency Risk Management Policy sets out:
For information on the investment strategies of each fund, follow the link below:
The investment processes followed by the manager
Nikko believes that they can deliver strong and repeatable risk-adjusted returns for their investors. This belief stems from their philosophy which is that:
The Statement of Investment Policy and Objectives (SIPO) is reviewed in full at least annually. Review, currency and adoption of the SIPO are the responsibility of the Investment Committee, which is governed by Nikko’s Investment Committee Charter.
When the SIPO is reviewed annually by the Investment Committee, the Investment Committee will take into account the investment strategy and objectives of each Fund and other matters including, but not limited to, relevant new standards or legislation and any material changes in market conditions. Significant changes may invoke an ad hoc review out of the annual cycle.
All amendments will be made in accordance with the Trust Deed and relevant law. The strategic asset allocations for all Funds are reviewed at least annually. Compliance with the SIPO is monitored both pre and post trade on a continuous basis, by automated systems (Bloomberg AIM). The Manager may amend or replace this SIPO only after having given reasonable prior written notice to and in consultation with the Supervisor.
Follow the link below to download Nikko’s Statement of Investment Policy and Objectives:
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.
Nikko Asset Management, as an asset management company, acts as a fiduciary on behalf of its clients and is firmly committed to putting its clients’ best interest first. It places fiduciary and ESG principles at the highest guiding theme of its corporate value and actions.
Nikko AM strongly believes that investments by considering environmental, social and governance (“ESG”) are inherent to long-term corporate value creation, and contribute to the realization of sustainable economic growth. As such, Nikko AM views ESG issues as an integral part of its fiduciary duty and endeavors to incorporate ESG principles in all its investment processes.
Nikko AM, for the realization of high-quality financial services that truly meet clients’ needs, always endeavors to act in the spirit of the fiduciary and ESG principles, and continually makes effort toward further improvement with the ideas of innovation.
For more on Nikko’s principles, follow the link below:
|Fiduciary and ESG Principles|
Where capital market securities are held by the Funds or the Wholesale Funds, Nikko may have the right to vote on shareholder resolutions. They exercise voting rights where available solely for the benefit of investors. Where they appoint an investment manager for a fund, they also outsource voting to that investment manager. They do not vote for the benefit of themselves or third parties. The Nikko AM Domestic Equities Corporate Governance Policy covers the requirements of the Nikko AM NZ Equity team to consider and vote on resolutions.
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 Nikko's funds can be found in their PDS.