by Craig Simpson
The latest data released for KiwiSaver performance as at June 30, 2013 is from Staples Rodway.
This is the first time we have profiled the Staples Rodway KiwiSaver Scheme so before looking at the performance and asset allocation breakdown we should look at some of the salient features and (of course) the fee structures first.
Staples Rodway have existed in NZ for over 65 years and is one of the leading tier two accounting firms. They are not just accountants mind you and offer clients access to a number of experts within the areas of business, tax, audit, investment and specialist services via their nationwide network. The company also wrote the original New Zealand 'Staples' Tax Guide and it's still published under that name today.
Staples Rodway's KiwiSaver Scheme does not confine itself to investing in the products provided by one organisation. Instead, independent investment managers have been selected on the basis of performance and managerial quality. This approach helps the manager avoid conflicts of interest that applies within some of the other schemes that only offer related party products.
This scheme provides access to three core portfolios, Conservative, Balanced and Growth.
Conservative Fund
The Conservative Fund is managed by Tyndall Investment Management New Zealand Limited and invests via the Tyndall Cash Fund. The investments are New Zealand dollar denominated cash investments including cash, deposits, bonds, floating rate notes and debt securities issued by registered banks, state owned enterprises, NZ or local Government and corporations with an interest rate exposure of 1 year or less.
As at 30 June 2013 the fund had NZ$16.1 mln.
Balanced Fund
The Balanced Fund is managed by OnePath (NZ) Limited and aims to provide a balance between growth and income by investing in a blend of shares, cash, fixed interest and listed property. Assets are selected from both New Zealand and international markets. The portfolio is actively managed.
As at 30 June 2013 the fund had NZ$14.4 mln.
Growth Fund
The Growth Fund is managed by Tyndall Investment Management New Zealand Limited and invests into a a more aggressive blend of shares and fixed interest than the Balanced Fund. Additionally there is also a weighting to alternative investments via the JP Morgan Multi-Strategy Fund II Limited and the Tyndall Option Fund.
The JP Morgan Multi-Strategy Fund II integrates a number of hedge fund strategies into one fund. The Tyndall Option Fund invests into cash deposits and bank bills with highly rated financial institutions. The assets are then used as collateral security for derivatives, in particular, selling options on long-term NZ, US, UK, Euro bloc or Australian government stock.
As at 30 June 2013 the fund had NZ$8.0 mln.
This KiwiSaver scheme is administered by Aon New Zealand and Public Trust has been appointed as trustee.
Fees
The table below outlines the fees as disclosed in the scheme's investment statement.
| Fund name | Administration Fee p.a | Management Fee p.a | Trustee Fee p.a | Fund Expenses p.a | Entry | Exit | Switch |
| Conservative | NZ$40 (deducted monthly NZ$3.33) | 0.75% |
0.05% up to NZ$200 mln 0.04% over NZ$200 mln Minimum Fee is NZ$20,000 p.a. (equivalent to 0.064% of the gross funds under management as at 30 June 2012) |
Max of 0.2% of the gross funds under management | Nil | Manager may charge NZ$25 if entire funds transferred out to another scheme within first 2 years | First 2 switches between the funds is free the NZ$25 for each subsequent switch |
| Balanced | 1.00% | Nil | |||||
| Growth | 1.15% | Nil |
All fees and expenses charged will have GST added if applicable.
Sub-manager fees
Tyndall Investment Management New Zealand Limited is paid 0.25% of Conservative Funds under management for the first NZ$10 mln, 0.18% for the second NZ$10 mln, and 0.15% for funds under management above NZ$20 mln.
OnePath (NZ) Limited is paid 0.65% per annum of Balanced Funds under management invested in the SIL Balanced Fund, with volume discounts of 15% for a fund size of NZ$5 mln to NZ$15 mln, 25% for the next NZ$10 mln and 35% for the balance of funds under management.
Tyndall Investment Management New Zealand Limited is paid 0.60% per annum of Growth Funds under management for the first NZ$10 mln invested in the Tyndall Balanced Fund and 0.50% per annum for funds under management above NZ$10 mln, with entry and exit fees of 0.11%; and 1.00% per annum of Growth Funds under management invested in the Tyndall Wholesale Aggressive Australasian Equity Fund (TWAAEF), with entry and exit fees of 0.40%; in addition a performance fee is payable for the TWAAEF of 10% of the gross return in excess of the benchmark return per annum.
A minimum fee of NZ$10,000 per annum is payable to Tyndall Investment Management New Zealand Limited for each of the Conservative Fund and the Growth Fund (NZ$20,000 per annum in total). There will be no additional fee payable by the Scheme or any member for services provided by the Investment Managers.
Below is a table of the longer term performance of the Staples Rodway funds. The return data is before tax and after fees and is as published by the managers. (No adjustments have been made to take into account those additional fees which scheme providers may charge and which are not included in calculating the fund performance. We do make such adjustments, but they will not be included until the full benchmarking is published.)
|
Staples Rodway KiwiSaver Scheme (30 June 2013) |
1 year (p.a.) |
5 year (p.a.) |
Since inception (1 Oct 2007) (p.a.) |
| % | % | % | |
| Conservative Fund | 3.0 | 3.3 | n/a |
| Balanced Fund | 16.2 | 5.8 | n/a |
| Growth Fund | 14.0 | 4.0 | n/a |
When compared to other KiwiSaver schemes with similar asset allocations the Conservative and Balanced funds have performed very well over the past three years.
The more aggressive Growth Fund lags the better performing funds in the aggressive sector over the past three years. The recent results will have been pulled down by the sell-off in bonds both domestically and globally as well as the exposure to Australian shares (circa 10%) which has generally under-performed other equity markets on the back of a weaker economy and fears of a financial crisis in China.
More detailed performance reporting can be found here ».
The table below outlines the asset allocation for each fund as at 30 June 2013.
|
Staples Rodway KiwiSaver Scheme |
Cash (%) |
NZ Bonds (%) |
Global Bonds (%) |
Property (%) |
NZ & AU Shares (%) |
Global Shares (%) |
Alternative Assets & Options (%) |
| Conservative Fund | 100.0 | ||||||
| Balanced Fund | 8.0 | 12.9 | 12.3 | 10.9 | 18.3 | 36.4 | 1.3 |
| Growth Fund | 14.7 | 10.4 | 4.6 | 26.0 | 28.8 | 16.0 |
Note: due to rounding the numbers may not add up to 100%.
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