New KiwiSaver provider CareSaver claims victory for active and ethical management as its funds beat their competition through market turmoil from Covid-19.
Tuesday April 7, 2020, 6:00 a.m.
Morningstar released new data showing that on average, conservative KiwiSaver funds were down 2.98% in March, balanced down 8%, growth down 10.56% and aggressively down 11, 91%.
Over the three months to the end of March, conservative funds fell 2.12%, balanced 8.95%, up 12.39% and aggressive 14.86%.
ANZ’s conservative fund fell 1.7% in the first quarter, 3.9% for Milford and 2.3% for Booster. At the same time, CareSaver posted a positive return of 1.8%.
In balanced funds, CareSaver lost 3.6% against 7.4% for Fisher Funds, 8.6% for ANZ and 10% for Milford.
CareSaver Managing Director John Berry said CareSaver investors have benefited from the active investing approach of its funds, their ability to react quickly to market changes and their focus on companies with strong environmental, social and governance (ESG) references.
“Conservative funds are designed to protect investors from the extreme market volatility we have experienced over the past month, so many savers in these funds should be wondering why their investments have performed poorly,” he said. declared.
“Investors trust their manager to look after their retirement savings. Managing investments in a bull market is easy, but bear markets sort out good and bad managers. We are delighted with our performance given the very trying conditions we faced. “
Chief investment officer Paul Brownsey said he transferred more money to cash as markets fell and focused on quality companies. She had also adjusted her currency hedging. Offshore investments are 70% unhedged as CareSaver sees more downside risk for the New Zealand dollar.
“CareSaver has also actively avoided corporate bonds and entire industries such as hotels, casinos and airlines. Many times, as an active manager, we were up all night following events abroad and reacting to new market developments. Compare that to a passive manager who simply has to take the losses the market serves him. “
Morningstar’s Asia-Pacific data director Greg Bunkall said CareSaver has held up well.
He said having higher cash balances was an advantage for the manager. CareSaver now has 47% equity exposure in its growth fund, 22% balanced and 3% conservative.
“As an ESG / sustainable manager, they will naturally avoid things that have not worked relatively well. Oil, airlines and gambling are avoided – and these are the segments of the market that have been hit the hardest. In fact, our ESG investment manager in the United States highlighted research that found that ESG-focused funds outperform general funds.
Brownsey said companies selected on the basis of ESG metrics were more resilient in a bear market and performed better in bull markets.
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