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 QuayStreet Kiwisaver Scheme's own website, fund updates, and the product disclosure statement published in September 2020.
Facts & History of the KiwiSaver provider
QuayStreet Asset Management Limited (QuayStreet) is a specialist funds management firm with a team located in Auckland, New Zealand and Sydney, Australia. QuayStreet offers a range of diversified and sector specific investment funds for investors. Their specialists seek to deliver investment returns for clients by actively managing the funds. QuayStreet is a wholly owned subsidiary of Craigs Investment Partners Limited.
✅ New Zealand Based Provider
For more information, please see Home Page below:
TheQuayStreet KiwiSaver Scheme manages ten funds and has total KiwiSaver Assets Under Management (AUM) of over $NZ 187 million and 2,611 KiwiSaver clients.
The investment team, structure and their alignment with clients
James Ring - Investment Manager
James has extensive experience in the funds management industry spanning over 30 years.
James brings a wealth of experience and expertise managing New Zealand and international equity mandates.
Most recently, James was Investment Manager at Rank Group managing the US based Reynolds Group Pension Funds. He was responsible for managing the global equities portfolio.
Andrew South - Investment Manager
Andrew has vast investment experience with a career spanning more than two decades. Prior to QuayStreet, Andrew was the Chief Investment Officer at Brook Asset Management with overall responsibility for portfolio construction, stock selection and asset allocation for all of Brook’s funds.
At Brook Asset Management Andrew was also responsible for Australasian sector research for the resources, financial and healthcare sectors.
Roy Cross - Senior Analyst & Portfolio Manager
Roy has considerable investment experience with more than a decade in the New Zealand market. Prior to QuayStreet, Roy was a Senior Analyst at Brook Asset Management where he commenced his career in 2005.
Stefan Stevanovic - Senior Analyst & Portfolio Manager
Stefan has considerable investment experience with more than a decade in the New Zealand market. Prior to QuayStreet, Stefan was a Senior Analyst at Brook Asset Management where he commenced his career in 2007.
The Scheme offers investments in the ten QuayStreet Funds and, as a result, the Scheme’s funds reflect the investment process undertaken by QuayStreet in relation to the QuayStreet Funds.
Craigs Investment Partners, as the owner of the Manager operates a Conflicts of Interest Policy which is adhered to by QuayStreet Asset Management Limited. It is designed to identify potential conflicts that may exist and then ensure any actual or perceived conflict is managed in an appropriate manner. This is typically done by disclosing details of any potential conflict to affected parties. The Policy is constructed to ensure at all times portfolio managers place the interests of the investors above their own interests or those of CIP or QuayStreet Asset Management Limited.
Trade Allocation & Execution Policy
QuayStreet Asset Management Limited has compliance procedures in place to minimise risks associated with trading.
While specific portfolio management responsibilities for funds have been allocated to individual portfolio managers, the entire investment team has full visibility of all trades and is authorised to transact on behalf of all the QuayStreet Funds. This ensures deal flows are monitored and minimises the risk of trading errors or aberrant behaviour.
The Compliance team, who are independent of the trading function, undertakes a daily review of portfolio positions and trades to ensure that QuayStreet Asset Management Limited is complying with the QuayStreet Funds’ investment guidelines.
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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.
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.
QuayStreet’s supervisor and custodian is The New Zealand Guardian Trust Company Limited (NZGT).
For more information on the NZGT, follow the link below:
On a monthly basis, the investment team monitors the performance of the QuayStreet Funds and the respective benchmarks. The performance of the Funds is measured over 1 month, 3 months, 6 months, 1 year, 3 years, 5 years and since inception. The 3 year, 5 year and since inception return calculations are annualised.
Monthly Fund Updates are comprehensive as they record returns to investors before fees and tax and include imputation credits where applicable, and additionally, they include a record of returns after the deduction of investment related fees, expenses, charged to the funds (including brokerage, supervisor fees, management fees and performance fees) and tax at 0%, 10.5%, 17.5%, and 28% Prescribed Investor Rates (“PIR”).
For more information on monitoring, follow the link below:
The investment processes followed by the manager
QuayStreet invests in accordance with their Responsible Investment policy, incorporating environmental, social and governance factors within their investment decision-making framework. They target investments which have good and sustainable underlying business models which are trading at an attractive valuation in relation to their “intrinsic value”. The “intrinsic value” is the valuation they derive after analysis that values the future cash flows of the investment at today’s prices. This basic philosophy applies to all security types and assets that QuayStreet invests in.
Following this investment philosophy, the QuayStreet Funds tend to be more concentrated than their respective market benchmarks. QuayStreet has a high level of conviction in their investment ideas which is reflected by larger investments in a smaller number of securities. However an appropriate level of diversification relative to the QuayStreet Funds’ risk profile is maintained at all times. QuayStreet believes in the benefit of being proactive, but not hyperactive in terms of managing the portfolios. They do not transact frequently and generally buy securities with the intention of holding them for the long term. However they do monitor investments closely and add to holdings that they believe are good value relative to their outlook and reduce those which they believe may be facing increasing risks.
The QuayStreet Funds are actively managed relative to their asset allocation targets. The exposure to asset classes will deviate from respective benchmarks in response to changing short term market conditions and the manager’s assessment of the risk and return outlook for the individual asset classes. The extent of Tactical Asset Allocation is based on the investment objectives of the relevant QuayStreet Fund and the allowable ranges for each asset class.
QuayStreet Asset Management Limited offers a range of funds with different risk profiles, designed to suit the individual objectives of investors. Each QuayStreet Fund has a benchmark asset class mix and investment range that reflects the portion of the portfolio that should be invested in defensive and/or growth asset classes. Key factors supporting the Strategic Asset Allocation decision include the investment team’s assumptions relating to the expected return and standard deviation of the various asset classes, along with an assumption regarding the correlation or relationship between the different asset classes.
The investment horizon for a Strategic Asset Allocation is typically long term.
Follow the link below to download the SIPO document for more information:
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.
Responsible Investment Policy
QuayStreet defines responsible investing as an incorporation of environmental, social and governance (ESG) factors within its investment decision-making framework. It is their belief this helps improve risk management and generation of long-term returns. As an investment manager, QuayStreet has a duty to act in the best interests of the Fund or Scheme’s participants and recognises that integration of ESG principles within the investment process allows it to fulfil this duty more completely. The primary objective of incorporating ESG considerations is to assess and consider how much influence ESG factors may have on financial performance and overall portfolio risk. This is applied within the investment decision-making process that seeks to achieve strong financial outcomes for clients.
The Responsible Investment (RI) Policy statement applies to investment management services provided by QuayStreet across its entire suite of Funds except those that adhere and are managed according to the QuayStreet’s Socially Responsible Investment (SRI) Policy (i.e. the QuayStreet Socially Responsible Investment Fund).
Socially Responsible Investment Policy
QuayStreet Asset Management Limited manages a socially responsible investment mandate (QuayStreet Socially Responsible Investment Fund), that invests in companies which score highly in Environmental, Social and Governance (ESG) factors. They seek a balance between financial and ESG performance of an investment. QuayStreet Asset Management Limited believes ESG performance can have a significant impact on an asset’s long-term return and therefore are committed in applying ESG analysis when determining investment suitability.
For the Fund, they conduct negative and positive screening methods alongside their traditional investment decision-making process for all direct investments.
If the Fund were to invest in an external socially responsible investment fund QuayStreet would conduct due diligence on the external fund’s socially responsible investment process and criteria. Negative screening is applied to filter out unsuitable investments from the global investment universe, whereas positive screening is applied to assess and score individual ESG factors on a stand-alone company basis.
Consistent with their investment philosophy, QuayStreet may exclude investment in companies that severely affect the environment or society to the extent these risks could also detrimentally affect the performance of the Fund.
Negative screening excludes companies that derive significant revenue from business practices QuayStreet deem as not being socially responsible and establishes a subset of investments collectively known as the socially responsible investment universe.
The list of business activities they deem as not being socially responsible are:
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?
QuayStreet KiwiSaver Plan has the following KiwiSaver Funds. More details on each of these funds can be found in the links below.