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Our hands-on 'active' approach to investing has delivered results for our investors (Investment Funds)

January 2018

To achieve your investment goals, you have many different providers to choose from, and each will have their own unique approach to investing your savings. The investment approach your provider takes is an important factor that’ll have an impact on the level of returns you can expect to receive, the fees you’ll pay and the ability to grow your savings over the long term.

We take an active approach to investing

ANZ Investments is an active manager, and we’re committed to our philosophy of active investment management. We want to be clear that our active investment management approach isn’t the same as what is sometimes portrayed in the media. In fact there are many different investment approaches that active managers from around the world have chosen to take.

At ANZ Investments, we are long term investors with a preference for holding quality investments, ones that are well diversified, and which are highly liquid (ensuring we can sell investments when we need to). We don’t speculate on buying or selling stocks just to make a quick buck.

Through our active management approach we believe we can deliver consistent, after fees, returns that are superior to a particular market index. We aim to do this by taking a long-term view, ensuring we don’t take undue risk, and making quality investments which we believe can perform well.

This has been the basis of our investment approach for over 25 years. We spend a significant amount of time and effort getting the basics right, which begins with choosing the best combination of asset classes (such as shares, property, cash and bonds) for each of our funds. We do this because we know this decision drives a significant portion of the overall return you can expect to receive from your investment. Then, through careful research and analysis, we and our managers combine the best quality investments for each of our funds.

High fees versus low fees

There are some providers that use a passive investment management approach for certain aspects of the management of their funds. Passive management aims to deliver returns that closely follow the performance of a market index for each asset class. However, passive managers generally look to replicate the performance of the market by buying all of the securities – good, bad or otherwise – that make up the market index.

Because their approach requires less analytics and decision-making, providers who mainly employ passive investment management tend to be at the lower end of the fee range. Active managers generally utilise a higher level of decision-making and analytics, and therefore the fees charged will typically be higher than those of a passive manager.

While fees play an important part in your savings, they shouldn't be the only consideration. More important is to think about the long term performance of your fund after fees, as this is one of the primary factors that’ll determine how much you’ll save over the long term – this, alongside your choice of fund (e.g. whether you’re a conservative balanced or growth investor) and the level of contributions you make.

We’ve delivered results for our investors

Our active investment approach has helped us to deliver above-average long term returns for our investors.

In the latest industry performance data from FundSource, it’s pleasing to see that ANZ’s diversified funds are among the top performing funds (on an after fee basis) in each of the categories where our funds are represented, over five years. Some of the highlights are:

  • The ANZ Investment Funds Growth Fund is ranked 3rd out of 33 funds in the FundSource Diversified Growth Category, while the OneAnswer Multi-Asset-Class Growth Fund is ranked 2nd in the same category¹.
  • The ANZ Investment Funds Conservative Fund is ranked 4th out of 25 funds in the FundSource Diversified Defensive category, while the OneAnswer Multi-Asset-Class Fund is ranked 5th in the same category¹.

And here’s something else to think about. The better the investment performance after fees, the faster your savings will grow.

How does our investment team stack up?

Of course, active management relies on the expertise of the investment team. So how does the ANZ Investments team stack up? Here’s what independent research house Morningstar had to say at its last formal review of our business:
“The depth and tenure of the ANZ investment team is unmatched amongst local multi-asset class providers.”

Morningstar Research Report, published 30 September 2016².

Independent research houses, such as Morningstar, review each provider’s people, processes and performance on behalf of investors. Their ratings represent their view on how the provider is likely to perform in the future.

Our active investment approach has delivered over the long term, through a focus on research, analysis and forming a view on both markets and individual investments. We’re proud of what we’ve achieved and we’d urge you to continue to look at the after fee returns of your investments over the long term to truly understand who the best providers are.

¹FundSource – Monthly Performance December 2017.
²For information about Morningstar see here.

ANZ New Zealand Investments Limited ('ANZ Investments') is the issuer and manager of the OneAnswer Multi-Asset-Class Funds and the OneAnswer Single-Asset-Class Funds (together, the 'schemes'). Important information is available under terms & conditions. Download the guide and product disclosure statement.