Part of the reason is the proposed tax changes which would see index funds lose their advantageous status.

AMP international and diversified manager Andrew Brockway says that in the New Zealand market 80% of returns come from income and the balance from capital gains.

The change in the way international assets are managed has been brought about partly by AMP’s split from Henderson. Formerly Henderson’s had the mandate to manage these assets, but now it is no longer part of the AMP family, the company is happy to use other managers.

AMP has used Mercer Investment Consulting to help select managers.

Its core global equity fund uses five managers, two value, two growth and Wellington which is neutral. Also within the balanced fund is an extended markets fund which uses six specialist managers.

AMP has also gone to a multi-manager approach with global bonds selecting four managers, one each for core, sovereign debt, credit and asset backed securities.

Brockway says the move to a multi-manager approach means that AMP can diversify its manager risk, access specialist skills and reduces its “style exposure.”

The final change to the mandate is that the fund will be able to invest in infrastructure assets.

AMP Capital managing director Catherine Savage says that any allocation to this asset class is at least a year away.

She says infrastructure “quite an attractive asset class long term” and the allocation is a way of “future proofing” the fund.

One of the big issues in this area is that many managers are looking it invest in infrastructure, but the assets are not readily available.

AMP has talked to the government about this issue and public/private sector ventures. She says they have not been keen to move down this track.