Asset allocation by peer review
The company’s chief investment officer David Beattie acknowledged Grosvenor’s recent fund performance hasn’t been good and blamed it on taking a too defensive position with its asset allocation.
He said its managers had some concerns around markets last year and had taken a more defensive approach than other KiwiSaver managers.
This, he illustrated with international share numbers. Grosvenor had around 40% exposure while other balanced fund managers were sitting at 55%.
Beattie said KiwiSaver managers could not go out on a limb with asset allocations.
“We gave ourselves too much rope and nearly hung ourselves.”
He said Grosvenor still had good absolute returns but KiwiSaver members are focused on relative returns and are constantly checking how their funds are performing against others.
“They don’t understand the nuances [of investment management],” he said.
As a result Grosvenor has changed its approach. It has reviewed its long-term strategic benchmarks, and will “much more explicitly incorporate peer group asset allocation” into its decision making.
Also it will take “minimal active positions” and has also reduced its risk budget from 5% to 3%.
“We have to join that game for as long as we are comfortable.”
Barry Peters
Brent Sheather
Anthony Edmonds
Philip Macalister
Peter Urbani
Steven Barton
