Home / Analysis / BNZ new fund range hints at industry-wide revamp

NAB’s New Zealand subsidiary BNZ has joined the post-Financial Markets Conduct Act (FMC) product renaissance with the launch of a new range of funds under its own banner. It is blending inhouse strategies from MLC and JANA with other external managers.

And for the first time, too, BNZ will provide direct access for NZ investors to a product manufactured by its parent National Australia Bank (NAB) as one of the four underlying managers in the ‘Private Wealth Series’.

As well as the JANA Multi-Manager Global Share Trust – offered by NAB wealth management subsidiary MLC – BNZ has appointed Nikko Asset Management (for cash, NZ corporate bonds and Australasian equities), AMP Capital (NZ fixed income) and Russell Investments for global bonds.

Sharon Mackay, BNZ head of wealth and private bank, said the JANA product would give exposure to high quality managers typically out of reach for NZ retail investors.

“It made sense to work with our Australian colleagues to bring global managers that most investors can’t access in their own right,” Mackay said.

The JANA fund invests in four underlying global equity managers: ‘enhanced passive’ Sydney boutique Redpoint Investment Management; the Copenhagen-based Carnegie Asset Management; UK firm Intermede Investment Partners; and, the US-headquartered Altrinsic Global Advisors.

According to Mackay, with the bank’s $1 billion plus KiwiSaver fund now bedded down, BNZ was “thinking about how to generate better outcomes” for its wider investment client base.

She said including KiwiSaver BNZ now manages close to $4 billion of investments compared to $1.5 billion just prior to the scheme’s 2013 launch.

The growth implies the private bank portfolio – comprised mainly of a discretionary investment management service (DIMS) investing in direct securities and third-party funds for offshore assets – has roughly doubled over the same period.

Mackay said the new BNZ-labeled funds were developed initially for private bank clients but a ‘mass affluent’ solution was also in the offing – with a mooted launch date this October.

“The Private Wealth Series is targeted towards the private bank clients,” she said. “But we’re still thinking about how to best help non private bank customers invest. We’re looking at launching a new range of funds for them in October.”

However, the new range of funds would not be extended to the BNZ KiwiSaver scheme, which has outsourced most investment management duties to Russell.

Mackay said adding new products to the BNZ KiwiSaver range would “add more complexity” for members.

“But we are looking to improve our KiwiSaver member education program with some changes due in the next month or so,” she said.

With the bulk of FMC compliance now complete, Mackay said BNZ was “returning to expansion” mode.

Indeed, after years of regulatory-imposed product drought, new funds are beginning to sprout in the NZ market. For example, as reported last week, Hunter Investment Funds hit the ground running with a PIE-packaged PIMCO fund last month.

Following suit, the Australian property investment firm APN launched a NZ product this month, like Hunter, also under the aegis of fund host Implemented Investment Solutions.

It is understood, a number of other NZ-based products are in the offing – including a new KiwiSaver scheme.

At the same time, a flurry of other Australian managers – most recently Bennelong Funds Management – are pitching to the NZ market under trans-Tasman Mutual Recognition (TTMR) product rules.

Disclose website data shows almost 550 offers are currently open to NZ retail investors via the TTMR regime – admittedly, over 130 of which are products offered by the Commonwealth Bank of Australia (or its Colonial subsidiary).

Offshore manager interest in NZ is also increasing in the wholesale market, according to Ben Trollip, Melville Jessup Weaver (MJW) senior investment consultant.

“There’s certainly more offerings in NZ from global managers – especially those who have bases in Australia,” Trollip said. “That’s fantastic for the NZ market to have more competition and access to quality offshore managers.”

– David Chaplin, Investment News NZ