By Craig Simpson
AMP have super-sized their existing offering to members and promised more choice and benefits. The AMP KiwiSaver offering now stands at 27 funds, 16 of which are part of the new launch.
Therese Singleton, AMP’s General Manager of Insurance and Investments, says, “KiwiSaver members increasingly want more options when it comes to saving for retirement, particularly as their balances grow and they take a more active role in managing their investments. The new range of funds enables members of our AMP KiwiSaver Scheme to easily access and switch between more funds through a single provider, so they can better manage their investments to help them achieve their financial goals, both now and in the future as their needs change.s in a bid to provide their current investors with greater alternatives and convenience when it comes to saving for their retirement.
AMP are now the second largest KiwiSaver Scheme provider in the market in terms of the number of funds available and third on funds under management. AMP are indeed a major player in what has become a bank dominated game.
The move to expand is interesting as some managers have been consolidating their offering in order to be more focused and competitive. Those with longer memories will remember that it wasn't that long ago that AMP purged their AMP Wealth (ex AXA) KiwiSaver scheme and consolidated all the existing funds into a compact offering.
One of the old funds that was previously closed in 2013 (Responsible Investment Leaders Fund) has been resucitated and repackaged as the Responsible Investment Balanced Fund. Interest in socially responsible and ethical investing is gathering momentum and this is a welcome addition to the KiwiSaver universe, which until now has been poorly serviced in this area.
AMP have leveraged off existing relationships to bring you funds from five familiar names across the industry: ASB, Nikko AM, Fisher Funds, ANZ and AMP Capital Investors.
All of the funds offered by AMP under KiwiSaver are shown in the table below along with their respective estimated total annual charges. The member fee which is not included in the total annual charges are set at $1.95 per month ($23.40 p.a.)
|Fund||Management Fee (%)||Administration Fee (%)||Est. costs and expenses (%)||Est. Total Annual Fee (%)||Est. Total fee of similar/same
external manager product
if available (%)
|Moderate Balanced Fund||0.50||0.53||0.22||1.25|
|Responsible Inv. Fund - Balanced*||0.55||0.53||0.26||1.34|
|Global Multi-Asset Fund*||0.90||0.53||0.22||1.65|
|Income Generator Fund*||0.45||0.53||0.26||1.24|
|International Fixed Int. Fund*||0.30||0.53||0.22||1.05|
|NZ Fixed Int. Fund*||0.20||0.53||0.18||0.91|
|Australasian Shares Fund*||0.50||0.53||0.20||1.23|
|Int. Shares Fund*||0.50||0.53||0.24||1.27|
|Passive Int. Shares Fund*||0.20||0.53||0.25||0.98|
|ANZ Conservative Fund*#||0.45||0.53||0.19||1.17||0.94 + Member fee $24 p.a.|
|ANZ Balanced Plus Fund||0.55||0.53||0.29||1.37|
|ANZ Growth Fund*#||0.65||0.53||0.19||1.37||1.10 + Member fee $24 p.a.|
|ASB Moderate Fund*#||0.40||0.53||0.20||1.13||0.58 + Member fee $30 p.a|
|ASB Balanced Fund*#||0.45||0.53||0.20||1.18||0.62 + Member fee $30 p.a|
|ASB Growth Fund*#||0.50||0.53||0.20||1.23||0.67 + Member fee $30 p.a.|
|Fisher Balanced Fund*#||0.60||0.53||0.34||1.47||Balanced Strategy offered by Fisher is a blend of existing Conservative and Growth Funds - there is no specific Balanced Fund offered.
0.895 + $36 p.a.
|Nikko AM Conservative Fund*||0.45||0.53||0.31||1.29|
|Nikko AM Balanced Fund||0.55||0.53||0.52||1.60|
|Nikko AM Growth Fund*||0.65||0.53||0.64||1.82|
|* New funds,
# similar product offered externally
AMP already offer Balanced funds managed by Fisher Funds, ANZ and Nikko.
Some of the funds offered by AMP in the revamped line-up are also available from the individual managers, with the exception of the Nikko AM funds. This means that if an AMP investor wishes to access a fund such as the ANZ Growth Fund for example they could well be paying more for the privilege, compared to if they became an ANZ customer and invested in the fund that way.
In response to the question about going direct to the existing manager and saving on the fees Singleton says "...It is important that members understand KiwiSaver is more than simply a managed fund or an investment vehicle. As well as fund management and administration services, which includes fees, members should give appropriate consideration to a provider’s overall offering when choosing one that’s right for them. While in some instances members may pay more to access specific funds through AMP rather than going directly, it is similar pricing in most instances. That means members can have the best of both worlds – access to AMP’s market leading products and services and now even more fund choice through a single provider."
We note that a portion of the Administration fee (up to 0.20%) may be paid to the adviser, distributor or intermediary.
The introduction of some single sector schemes will suit those looking for more targeted exposures to specific markets and the passive international shares fund is a reasonable proposition for those seeking a lower cost international share exposure.
The Income Generator and Global Multi Asset funds are exciting new additions.
The Income Generator Fund looks to generate reliable and reinvestable income from a diversified portfolio of assets (growth and defensive). This fund already exists outside of KiwiSaver and is managed by AMP Capital Investors. The website lists the one-year return to June 2016 as 10.01% (before tax and fees).
In contrast the Global Multi Asset Fund is an alternative investment strategy that seeks to generate positive returns across various market conditions. The fund aims to produce a gross return that is 5.25% above CPI inflation over a rolling five year period. The fund already exists outside of KiwiSaver and is managed by AMP Capital Investors. The product return over the past year return to June 2016 is shown on the website as 2.82% (before tax and fees).
We will start to include the new AMP products into our analysis and KiwiSaver commentary from the next quarter ending September 2016