the aon investment update · the aon investment update as at 29 february 2016 risk. reinsurance....
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Aon Hewitt
The Aon Investment Updateas at 29 February 2016
Risk. Reinsurance. Human Resources.
Aon Hewitt
Aon Hewitt Investment Consulting
This survey is produced by Aon Hewitt New Zealand Other investment consulting services include: • Establishing investment objectives for both our clients and investment managers.
• Determining long-term investment strategies, in the form of benchmark portfolios and sector ranges, consistent with the investment objectives.
• Determining the efficient frontier and risk/return profiles.
• Asset/liability modelling.
• Reviewing contractual agreements and legal documentation.
• Assisting in the appointment of investment managers, by
• Establishing the selection criteria,
• Identifying suitable investment managers,
• Analysing investment managers' capabilities against the criteria,
• Carrying out qualitative reviews.
• Performance monitoring, against both investment objectives and competitors.
• Communication of investment objectives and strategies to investors.
Our Global Reach
We provide a complete range of global investment consulting services tailored to clients' specific goals and circumstances. Our New Zealand actuarial and investment
consulting team has a wealth of local experience – but we are also backed by the substantial resources of Aon Hewitt globally. We know the local market and can
provide relevant and appropriate advice for New Zealand clients – and we have access to global best practice solutions.
If you need any help reviewing your fund’s strategic long term asset allocations, or require any assistance with manager selection, please call your Aon Hewitt
consultant. Contact details are at the back of this report on page 13.
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Aon Hewitt
Investment Commentary February 2016
Market summary Equity markets fell again in February following sharp falls in January, but losses were smaller than they might have been thanks to a significant rebound in the second half of the month. The same three factors continue to influence markets – concerns about the prospects for global economic growth, commodity prices and central bank policies. In the US expectations for another increase in interest rates continue to be pushed out as Federal Reserve chair Janet Yellen hinted that further increases have been put on hold as a result of the turbulent start to the year in financial markets. US equities posted a small decline in February. In Europe the main talking point was the decision from the UK Prime Minister, David Cameron, to hold a referendum on Britain’s membership of the European Union on 23 June. Boris Johnson, the Mayor of London and a Conservative Member of Parliament announced his intention to vote against Britain’s continued membership. It appears that the vote will be very close, and the main result of this uncertainty has been a sharp fall in the value of sterling. With weak economic data and growing concerns about the health of the European banks, investors were pinning their hopes on positive action from European Central Bank president Mario Draghi. Draghi duly delivered at the ECB meeting on March 10, announcing a raft of new measures including cutting the deposit rate to -0.4%. But he undid all his good work at the press conference that followed the meeting when he said that he did not anticipate any further rate cuts. The ongoing volatility in equity markets continued to benefit government bonds. According to research from JP Morgan, government bonds have had their best start to the year since 1993, with the main government bond index returning 2.1% for the month and 3.4% so far this year. The 10-year US Treasury yield fell from 1.92% to 1.73% in February and the German 10-year Bund yield fell to just 0.11%. Meanwhile the Japanese government sold 10 year bonds at a negative yield for the first time ever, selling 2.2 trillion yen (US$19.5 billion) of the debt at an average yield of -0.024%. In New Zealand yields also fell and the S&P NZX NZ Goverment Stock index returned 1.35% over the month.
Fund Performance Balanced Fund returns for February ranged from -1.1% (Milford) to 1.0% (Mercer). The median manager has returned -1.5% over the last 3 months, and 3.5% over the last 12 months. Nikko's 12 month return of 6.1% is well ahead of the next best manager - Fisher wth 3.8%. At the sector level, the best performance over the month came from New Zealand bonds. The median manager in this sector returned 1.0%, compared with 1.3% for the S&P NZX Government Stock Index. Overseas fixed interest also performed well. The Russell Global Bond Fund returned 0.8% over the month, while each of the other funds in this sector returned 0.7%. The worst performing sector was international equities, where the median return for the month was -2.0% (unhedged). Over the last 3 months the median manager return in this sector is -8.3% which is broadly in line with the index. The core domestic equity manager returns ranged from -2.1% (Milford's Trans Tasman fund) to 1.2% (Castle Point's Trans Tasman Strategy). Castle Point also led the way in the Absolute Return category, with their Ranger Fund returning 2.2%. Devon's Alpha fund has struggled in recent months, but still leads the way over a three year timeframe. New Zealand Fund Managment Changes AMP Capital announced the closure of the Strategic NZ Shares fund with investors being given the option to transfer into the NZ Shares Fund. Pathfinder Asset Management announced that it has hired a full-time research analyst to join founders John Berry and Paul Brownsey with the appointment of Karl Geal-Otter. Milford Asset Management announced the appointment of Paul Morris to the position of Senior Investment Analyst, based in Auckland. Paul previously held roles with ABN AMRO & Merrill Lynch in London, as well as locally with JBWere and Macquarie Private Wealth.
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Aon Hewitt
Sector 1 Month 1 Qtr 1 Yr 3 Yrs 5 Yrs 2016 2015 2014 2013 2012 5 Yrs
NZ Cash ANZ 90D Bank Bills 0.2 0.7 3.3 3.2 3.0 3.3 3.5 2.7 2.7 2.8 0.1
Median Manager 0.2 0.8 3.8 4.1 3.7 3.8 4.3 3.9 4.1 3.6 0.1
NZ Fixed Interest ANZ NZ Govt Stock 1.3 3.1 6.4 4.8 5.9 6.4 8.6 -0.3 5.5 9.7 3.1
Median Manager 1.0 2.3 6.8 5.6 6.7 6.8 8.9 1.6 7.3 9.1 2.4
Global Fixed Interest Barclays Agg 1.1 2.9 5.3 6.7 7.4 5.3 10.8 4.1 7.1 9.6 2.6
Median Manager 0.7 1.9 3.5 6.4 8.0 3.5 11.8 4.4 10.0 10.8 2.6
Australasian Equities NZX 50 Gross -1.0 2.2 7.4 14.4 14.6 7.4 19.4 16.9 31.8 -0.0 8.4
Median Manager 0.1 1.2 7.4 15.4 14.8 7.4 19.7 19.2 31.1 -0.0 8.6
Global Equities (unhedged) MSCI ACWI -2.5 -8.4 0.6 11.9 6.5 0.6 19.4 16.6 11.1 -12.2 9.9
Median Manager -2.0 -8.3 4.7 14.0 7.9 4.7 20.4 18.6 12.5 -11.2 10.8
Australasian Property NZX Property -0.1 1.6 10.4 12.7 14.8 10.4 27.6 1.6 21.1 15.2 7.2
Median Manager 0.4 2.2 10.4 14.5 16.9 10.4 27.3 5.6 25.6 15.3 6.9
Global Property UBS Property -0.1 -2.3 -2.6 11.0 12.0 -2.6 29.1 8.9 24.6 3.1 13.0
Median Manager -0.9 -3.9 -3.4 11.3 11.9 -3.4 27.7 11.0 23.2 3.3 14.8
Median Manager Performance v Benchmark
Returns (%) gross of tax and fees
VolatilityFor the period to 29 Feb 2016 For the year ended 29 February
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
NZ Cash NZ Fixed Global Fixed Australasian Eq Global Eq (uh) Australasian Prop Global Property
1 Month Performance (%)
Benchmark Median Manager
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Aon Hewitt
FUM
Manager ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol SR Rk
AMP Capital Investors RIL 41 -0.7 (6) -3.0 (7) -2.0 (7) 7.8 (6) 8.4 (5) -2.0 14.1 12.0 15.5 3.3 4.5 1.2 (7)
ANZ Investments 517 0.3 (3) -1.8 (6) 2.6 (6) 10.7 (3) 10.7 (2) 2.6 17.0 12.9 18.2 3.7 5.3 1.4 (3)
Castle Point Funds 8 0.4 (2) 0.2 (1) 3.5 (4) 6.6 (7) 6.6 (7) 3.5 6.6 9.8 10.5 3.0 2.9 1.2 (6)
Fisher Institutional 800 0.1 (4) -0.6 (2) 3.8 (2) 8.9 (5) 8.2 (6) 3.8 13.2 9.8 12.9 1.8 4.2 1.3 (5)
Mercer 1,049 1.0 (1) -1.1 (3) 2.8 (5) 9.9 (4) 8.9 (4) 2.8 14.3 13.1 11.3 3.5 4.3 1.4 (4)
Milford Funds 311 -1.1 (7) -1.7 (5) 3.6 (3) 11.7 (1) 12.2 (1) 3.6 18.3 13.7 21.3 5.0 4.6 2.0 (1)
Nikko Asset Management 219 -0.3 (5) -1.5 (4) 6.4 (1) 11.3 (2) 9.8 (3) 6.4 15.2 12.4 14.6 1.3 4.2 1.6 (2)
Minimum -1.1 -3.0 -2.0 6.6 6.6 -2.0 6.6 9.8 10.5 1.3 2.9 1.2
Median 0.1 -1.5 3.5 9.9 8.9 3.5 14.3 12.4 14.6 3.3 4.3 1.4
Maximum 1.0 0.2 6.4 11.7 12.2 6.4 18.3 13.7 21.3 5.0 5.3 2.0
Balanced Funds
Returns (%) gross of tax and fees
For the period to 29 Feb 2016 For the year ended 29 February 5 Years
14
5
12
13
13
14
11
15
10
4
16
10
8
12
13
27
13
20
18
12
29
21
19
24
9
13
15
27
26
27
22
31
37
35
5
10
12
6
10
10
15
20
11
4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Castle Point
Nikko
Milford
Fisher
Mercer
ANZ
AMPCI
Asset Allocation
Cash
NZ Fixed
Global Fixed
NZ Shares
Global Shares
Property
Alternative
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Aon Hewitt
Bench FUM % in
Manager Fund mark ($m) Aus 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR* Rk
Core
AMPCI NZ Shares 1 447 0 0.1 (11) 1.9 (4) 8.0 (10) 14.9 (12) 14.8 (9) 8.0 23.0 14.2 30.9 0.6 8.6 0.2 2.7 0.1 (11)
AMPCI NZ Shares RIL 1 10 0 0.4 (8) 1.6 (6) 7.4 (11) 15.4 (9) 7.4 23.6 15.7
AMPCI Strategic NZ Share 2 142 0 -0.5 (14) 1.2 (11) 8.2 (9) 15.8 (5) 14.8 (8) 8.2 25.0 14.9 31.1 -1.9 8.3 -0.2 3.2 -0.1 (15)
ANZ NZ Equities 1 122 0 0.5 (7) 1.8 (5) 5.2 (16) 14.6 (14) 15.5 (3) 5.2 18.6 20.6 32.3 3.5 8.5 0.8 2.0 0.4 (6)
ANZ Australasian Equity 1 712 9 0.5 (6) 1.4 (8) 4.9 (18) 14.4 (15) 14.9 (7) 4.9 19.5 19.3 31.6 1.7 8.5 0.3 2.0 0.1 (10)
CPFM Trans Tasman Strategy 1 0 18 1.2 (1) 2.5 (2) 8.8 (6) 8.8 19.9
Devon NZ Core 1 157 16 0.8 (3) 1.3 (9) 2.8 (19) 16.5 (3) 14.8 (10) 2.8 28.9 19.2 27.6 -1.0 8.4 0.2 3.4 0.0 (12)
Devon Trans Tasman 3 156 45 -1.6 (19) -3.1 (20) -1.9 (21) 15.9 (4) 12.4 (15) -1.9 25.9 26.0 24.5 -7.4 9.0 4.6 4.6 1.0 (3)
Fisher Trans Tasman Equities 1 517 32 0.7 (4) 1.4 (7) 7.2 (12) 12.7 (16) 14.8 (11) 7.2 19.1 11.9 37.5 1.3 9.3 1.1 3.4 0.3 (7)
Harbour Australasian Equity 5 652 28 0.1 (10) 1.1 (13) 9.3 (4) 15.2 (11) 14.5 (12) 9.3 13.4 23.4 31.9 -2.2 9.3 -1.6 4.4 -0.4 (16)
Harbour Australasian Equity Focus 3 50 54 -1.3 (18) -0.2 (17) 12.2 (1) 12.2 8.2
Harbour Advanced Beta 2 24 0 -0.1 (12) 1.0 (14) 7.1 (13) 7.1
Mercer Trans Tasman Equity 1 385 22 0.4 (9) 1.2 (10) 6.6 (14) 15.7 (8) 15.1 (5) 6.6 18.4 22.7 29.9 0.5 8.3 0.4 2.1 0.2 (8)
Milford NZ Equities 1 234 0 -0.8 (15) 1.1 (12) 10.8 (2) 18.2 (2) 18.0 (1) 10.8 12.4 32.5 34.9 2.8 8.6 3.0 3.2 0.9 (4)
Milford Trans Tasman 3 217 42 -2.1 (21) -2.4 (19) 0.7 (20) 10.3 (17) 14.2 (14) 0.7 15.0 15.9 34.5 7.4 8.4 6.2 3.2 2.0 (1)
Mint Trans Tasman Equity 1 83 12 -1.0 (16) 0.3 (15) 8.5 (8) 18.6 (1) 17.8 (2) 8.5 21.7 26.4 28.5 5.9 7.9 2.7 5.0 0.5 (5)
Nikko Core Domestic Equity 1 250 8 1.1 (2) 2.4 (3) 8.5 (7) 15.7 (7) 15.0 (6) 8.5 22.2 16.8 30.8 -0.6 8.4 0.4 1.9 0.2 (9)
Nikko Australasian Smallcap 4 5 70 -1.6 (20) -3.1 (21) 10.3 (3) 10.0 (18) 9.6 (16) 10.3 12.0 7.8 23.6 -4.0 12.3 11.5 5.9 1.9 (2)
Russell NZ Shares 5 122 0 0.7 (5) 2.6 (1) 9.1 (5) 15.3 (10) 9.1 17.9 19.2
Salt NZ Plus Share 1 424 4 -0.1 (13) 0.3 (16) 5.3 (15) 14.8 (13) 14.5 (13) 5.3 23.9 16.1 31.0 -0.8 9.0 -0.1 3.0 -0.0 (14)
Salt Javelin 2 75 15 -1.0 (17) -0.9 (18) 5.0 (17) 15.8 (6) 15.3 (4) 5.0 21.1 22.1 32.2 -0.7 9.5 0.2 4.6 0.0 (13)
Minimum -2.1 -3.1 -1.9 10.0 9.6 -1.9 8.2 7.8 23.6 -7.4 7.9 -1.6 1.9 -0.4
Median 0.1 1.2 7.4 15.4 14.8 7.4 19.7 19.2 31.1 -0.0 8.6 0.4 3.2 0.2
Maximum 1.2 2.6 12.2 18.6 18.0 12.2 28.9 32.5 37.5 7.4 12.3 11.5 5.9 2.0
Absolute Return
ANZ Equity Selection 6 31 0 -0.3 (3) -0.4 (3) 0.0 (5) 11.4 (4) 12.9 (4) 0.0 15.7 19.4 27.0 4.5 7.4 4.3 1.3 (3)
CPFM Ranger 7 11 41 2.2 (1) 2.0 (1) 4.0 (4) 4.0 6.9
Devon Alpha 8 94 33 -1.5 (6) -3.7 (6) -2.3 (6) 16.8 (1) 13.3 (3) -2.3 22.1 33.5 25.5 -6.7 7.9 0.5 1.3 (4)
Milford Active Growth 9 696 13 -1.2 (5) -1.4 (5) 6.3 (3) 15.3 (3) 17.2 (1) 6.3 17.2 22.9 34.2 7.4 5.8 6.1 2.4 (1)
Nikko Concentrated 6 82 26 0.7 (2) -0.7 (4) 9.5 (2) 16.5 (2) 13.9 (2) 9.5 27.6 13.2 28.7 -5.8 8.0 3.6 1.4 (2)
Salt Long/Short 7 62 67 -1.2 (4) 0.7 (2) 16.5 (1) 16.5
Minimum -1.5 -3.7 -2.3 11.4 12.9 -2.3 6.9 13.2 25.5 -6.7 5.8 0.5 1.3
Median -0.3 -0.7 4.0 15.9 13.6 4.0 17.2 21.1 27.8 -0.7 7.6 4.0 1.3
Maximum 2.2 2.0 9.5 16.8 17.2 9.5 27.6 33.5 34.2 7.4 8.0 6.1 2.4
*For Absolute Return Funds we show the Sharp Ratio, not Information Ratio
New Zealand and Australian Equities (Page 1 of 2)
Returns (%) gross of tax and fees
For the period to 29 Feb 2016 For the year ended 29 February For last 5 years
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Aon Hewitt
Bench FUM % in
Manager Fund mark ($m) Aus 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
Equity Income
Devon Dividend Yield 3 107 36 -1.3 (3) 0.4 (2) 6.8 (2) 17.2 (2) 6.8 32.6 13.6 30.1
Harbour Australasian Eq Income n/a 90 0 -1.1 (2) -2.5 (3) 1.5 (3) 13.7 (3) 1.5 30.1 11.3 33.7
Salt Dividend Appreciation 1 82 0 0.4 (1) 1.6 (1) 8.6 (1) 17.5 (1) 16.3 (1) 8.6 30.0 15.1 31.3 -0.2 8.5 1.5 3.1 0.5 (1)
Minimum -1.3 -2.5 1.5 13.7 16.3 1.5 30.0 11.3 30.1 -0.2 8.5 1.5 3.1 0.5
Median 1.1 -0.4 -6.8 -17.2 -16.3 -6.8 -30.1 -13.6 -31.3 0.2 -8.5 -1.5 -3.1 -0.5
Maximum -0.4 -1.6 -8.6 -17.5 -16.3 -8.6 -32.6 -15.1 -33.7 0.2 -8.5 -1.5 -3.1 -0.5
Australian Only
AMPCI Australian Share 10 23 100 -3.1 (3) -6.4 (2) -8.1 (4) 0.4 (3) 1.5 (3) -8.1 15.1 -4.4 19.0 -10.3 12.8 1.2 1.9 0.6 (2)
ANZ Australian Share 10 507 100 -3.0 (2) -6.6 (3) -6.5 (3) 1.2 (2) 2.5 (2) -6.5 8.1 2.4 21.7 -10.0 12.3 2.1 3.8 0.6 (3)
Devon Australian 10 44 100 -4.4 (4) -6.7 (4) -2.1 (2) 7.9 (1) 6.1 (1) -2.1 20.0 6.8 22.3 -12.5 12.2 5.6 3.3 1.7 (1)
Milford Dynamic 11 156 100 -2.5 (1) -1.1 (1) 4.3 (1) 4.3 19.4
Minimum -4.4 -6.7 -8.1 0.4 1.5 -8.1 8.1 -4.4 19.0 -12.5 12.2 1.2 1.9 0.6
Median -3.0 -6.5 -4.3 1.2 2.5 -4.3 17.2 2.4 21.7 -10.3 12.3 2.1 3.3 0.6
Maximum -2.5 -1.1 4.3 7.9 6.1 4.3 20.0 6.8 22.3 -10.0 12.8 5.6 3.8 1.7
Benchmarks
S&P/NZX 50 Gross incl I/C 1 1.0 2.2 7.4 14.4 14.6 7.4 19.4 16.9 31.8 -0.0 8.4
S&P/NZX 50 Portfolio incl I/C 2 0.6 2.0 7.0 15.7 15.1 7.0 23.1 17.5 31.8 -1.1 8.1
NZX50/ASX200 (50/50) 3 -0.8 -1.9 -1.3 6.4 7.4 -1.3 15.5 5.8 25.8 -5.7 9.1
NZX/ASX Small Cap 4 -0.0 -1.5 2.3 -1.5 -1.9 2.3 2.6 -8.9 4.1 -8.6 12.0
Russell NZ Tradeable Gross 5 1.4 2.7 9.2 16.2 16.3 9.2 22.4 17.4 31.8 3.0 8.5
90 Day BB Index + 5% 6 0.7 2.0 8.6 8.4 8.2 8.6 8.8 7.9 7.9 8.0 0.1
OCR + 5% 7 0.6 1.8 8.0 7.9 7.8 8.0 8.3 7.5 7.5 7.5 0.1
12% p.a. 8 1.0 3.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 n/a
10% p.a. 9 0.8 2.5 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 n/a
ASX 200 10 -2.7 -6.0 -9.7 -1.4 0.3 -9.7 11.2 -4.6 19.7 -11.7 13.1
ASX SmallCap Industrials 11 -1.7 -3.2 -0.9 5.5 -0.9 9.8 8.1 19.4
ASX 200 (in A$) -1.8 -4.6 -13.7 3.0 4.9 -13.7 14.5 10.6 24.2 -6.6 12.5
New Zealand and Australian Equities (Page 2 of 2)
Returns (%) gross of tax and fees
For the period to 29 Feb 2016 For the year ended 29 February For last 5 years
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Aon Hewitt
Bench FUM
Manager Fund mark ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
AMPCI Global Shares 2 670 -1.6 (6) -5.5 (3) 5.6 (5) 16.5 (2) 9.3 (5) 5.6 20.4 24.4 13.2 -12.8 10.2 2.7 2.0 1.4 (2)
AMPCI RIL Global Shares 1 50 -2.8 (13) -9.1 (10) -1.8 (13) 12.1 (10) 6.8 (10) -1.8 19.8 19.7 12.5 -12.2 10.3 0.4 1.4 0.3 (7)
ANZ International Share 1 3,352 -0.9 (5) -6.9 (5) 5.6 (6) 15.5 (3) 10.5 (2) 5.6 21.0 20.5 17.0 -8.5 10.8 3.9 2.4 1.6 (1)
EC Value Fund 1 23 -2.0 (7) -2.9 (1) 5.3 (7) 11.7 (11) 7.9 (7) 5.3 10.9 19.5 10.4 -5.0 9.0 1.1 5.3 0.2 (9)
Fisher Overseas Equities 1 715 -2.6 (12) -8.3 (8) 0.8 (12) 11.3 (12) 5.2 (13) 0.8 17.8 16.2 8.6 -13.8 9.8 -1.2 1.8 -0.6 (11)
FRK Global Growth 1 64 -0.2 (4) -9.2 (11) 7.0 (3) 15.1 (4) 9.6 (3) 7.0 20.4 18.3 13.3 -8.4 11.0 3.0 4.3 0.7 (5)
FRK Global Trust 1 374 -3.3 (15) -12.2 (15) -5.6 (14) 10.5 (13) 6.5 (12) -5.6 11.4 28.2 16.3 -12.5 11.8 0.2 4.1 0.0 (10)
Harbour Global Equity Growth 1 9 -2.2 (9) -8.6 (9) 2.0 (10) 2.0
Magellan Global 1 8,398 -2.3 (10) -6.0 (4) 9.8 (2) 17.5 (1) 16.0 (1) 9.8 21.9 21.1 24.6 4.0 11.2 8.9 6.5 1.4 (3)
Mercer Global Equities 2 738 0.5 (3) -7.4 (6) 2.8 (9) 14.0 (7) 7.5 (8) 2.8 21.8 18.2 9.0 -11.2 11.1 0.2 4.4 -1.1 (12)
MGH MGH Investments 1 24 -2.0 (8) -5.3 (2) 12.1 (1) 12.7 (9) 6.6 (11) 12.1 11.4 14.5 9.2 -11.8 9.6 0.5 5.2 -3.6 (13)
Nikko Global Equity 1 490 -2.4 (11) -8.1 (7) 5.9 (4) 14.5 (6) 9.4 (4) 5.9 19.8 18.2 12.7 -7.2 9.6 2.7 2.1 1.3 (4)
Nikko Global SRI 1 19 1.1 (1) -9.3 (12) 4.7 (8) 14.5 (5) 8.5 (6) 4.7 21.1 18.6 10.9 -10.0 11.8 2.0 4.8 0.4 (6)
Russell Emerging Markets 4 0 0.9 (2) -10.2 (14) -12.1 (15) -12.1
Russell Global Opportunities 3 247 -2.9 (14) -9.7 (13) 1.5 (11) 13.4 (8) 7.1 (9) 1.5 21.4 18.5 10.2 -12.2 11.1 0.5 2.2 0.2 (8)
Minimum -3.3 -12.2 -12.1 10.5 5.2 -12.1 10.9 14.5 8.6 -13.8 9.0 -1.2 1.4 -3.6
Median -2.0 -8.3 4.7 14.0 7.9 4.7 20.4 18.6 12.5 -11.2 10.8 1.1 4.1 0.3
Maximum 1.1 -2.9 12.1 17.5 16.0 12.1 21.9 28.2 24.6 4.0 11.8 8.9 6.5 1.6
MSCI All Country World Index 1 -2.5 -8.4 0.6 11.9 6.5 0.6 19.4 16.6 11.1 -12.2 9.9
MSCI World Index 2 -2.6 -8.4 2.1 13.7 7.7 2.1 19.8 20.1 12.6 -12.4 10.3
Russell Global Large Cap 3 -2.4 -8.4 0.8 12.3 6.7 0.8 19.4 17.5 11.3 -12.3 10.0
Russell Emerging Markets Index 4 -2.0 -8.8 -14.3 -14.3
MSCI World Index (100% hedged) -1.4 -8.5 -8.1 10.4 9.2 -8.1 18.0 24.0 15.2 0.1 11.6
FUM
Manager Fund ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Performance Objective
Milford Diversified Income 1,205 0.6 (1) 1.6 (3) 7.5 (2) 13.5 (1) 15.0 (1) 7.5 20.6 12.7 23.1 11.7 OCR + 2.5%
Mint Diversified Income 93 0.5 (2) 1.7 (2) 6.7 (3) 6.7 OCR + 2.5%
Nikko Income 8 0.3 (3) 1.8 (1) 10.5 (1) 7.7 (2) 7.7 (2) 10.5 7.5 5.1 9.7 5.7 10% p.a.
Harbour Income 71 0.2 (4) 0.6 (4) 5.1 (4) 5.1 OCR + 2.0%
Diversified Income
Returns (%) gross of tax and fees
For the period to 29 Feb 2016 For the year ended 29 February
Returns (%) gross of tax and fees
For the period to 29 Feb 2016 For last 5 years
Global Equities (Unhedged)
For the year ended 29 February
Aon Investment Update Page 8 of 14
Aon Hewitt
Bench FUM
Manager Fund mark ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
Global Aggregate:
AMPCI Global Fixed Interest 1 120 0.7 (5) 1.7 (5) 3.0 (5) 6.0 (5) 6.4 (5) 3.0 10.7 4.4 6.8 7.4 2.6 -0.9 1.6 -0.6 (5)
ANZ International Aggregate 1 705 0.7 (3) 2.1 (1) 4.3 (2) 4.3 11.2
Fisher Global Fixed Interest 1 948 0.7 (2) 1.9 (4) 3.6 (3) 6.2 (4) 8.7 (1) 3.6 12.5 2.9 11.5 13.3 3.3 1.2 1.7 0.7 (1)
Mercer Global Bonds 1 674 0.7 (4) 0.8 (6) 2.3 (6) 6.4 (3) 8.0 (3) 2.3 12.3 4.8 10.0 11.0 2.6 0.6 1.4 0.4 (3)
Nikko Global Fixed Interest 1 269 0.7 (6) 1.9 (2) 5.0 (1) 6.5 (1) 7.1 (4) 5.0 9.6 5.1 6.9 9.0 2.4 -0.3 0.9 -0.3 (4)
Russell Global Bond 1 1,620 0.8 (1) 1.9 (3) 3.4 (4) 6.5 (2) 8.4 (2) 3.4 12.3 4.0 11.7 10.8 3.0 1.0 1.4 0.7 (2)
Minimum 0.7 0.8 2.3 6.0 6.4 2.3 9.6 2.9 6.8 7.4 2.4 -0.9 0.9 -0.6
Median 0.7 1.9 3.5 6.4 8.0 3.5 11.8 4.4 10.0 10.8 2.6 0.6 1.4 0.4
Maximum 0.8 2.1 5.0 6.5 8.7 5.0 12.5 5.1 11.7 13.3 3.3 1.2 1.7 0.7
Other:
LMI Brandywine* 2 182 0.2 (3) -0.3 (3) -4.0 (3) 6.5 (1) 9.9 (1) -4.0 23.7 1.7 16.2 14.0 5.6 2.1 4.8 0.4 (1)
ANZ International Sovereign 2 2,384 1.2 (1) 3.3 (1) 5.7 (1) 6.4 (2) 7.1 (2) 5.7 11.0 2.7 6.5 9.7 2.9 -0.5 0.5 -1.0 (2)
ANZ International Credit x 1,167 0.7 (2) 0.8 (2) 1.7 (2) 1.7 10.5
Barclays Capital Global Agg Index 1 1.1 2.9 5.3 6.7 7.4 5.3 10.8 4.1 7.1 9.6 2.6
Citigroup World Govt Bond Index 2 1.4 3.7 6.4 7.4 7.6 6.4 11.5 4.4 6.4 9.7 2.8
FUM
Manager Fund ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Benchmark
AMPCI Commodities 261 -0.7 (4) -4.2 (4) -22.1 (8) -13.5 (6) -22.1 -18.2 1.5 Bloomberg Commodity Index
AMPCI Infrastructure 175 -0.9 (5) -5.8 (5) -10.0 (7) 11.4 (4) -10.0 27.1 20.7 DJ Brookfield Global Infrastructure Index
FSI Infrastructure 144 1.6 (1) 1.2 (2) 0.6 (3) 0.6 25.3 FTSE Global Core Infrastructure Net (NZD Hedged)
Magellan Infrastructure 987 0.2 (3) 2.5 (1) 16.2 (1) 12.6 (1) 11.2 (1) 16.2 18.6 3.6 15.8 3.0 S&P Global Infrastructure Index (NZD Hedged)
Milford Global 271 -3.3 (7) -8.6 (7) -2.1 (5) -2.1 16.6 OCR + 5%
PATH Commodity Plus Fund 65 0.2 (2) 0.8 (3) -0.7 (4) -0.2 (5) -3.1 (3) -0.7 1.4 -1.3 -8.3 -6.1 Bloomberg Commodity Index
PATH World Equity Fund 33 -4.6 (8) -10.9 (8) -2.8 (6) 11.7 (3) -2.8 24.5 15.2 6.1 MSCI AC World
PATH Global Water Fund 8 -1.0 (6) -7.0 (6) 3.9 (2) 12.5 (2) 8.0 (2) 3.9 7.4 27.5 13.4 -8.9 n/a
* Brandywine returns use a simulated hedge prior to January 2012
Returns (%) gross of tax and fees
For the period to 29 Feb 2016
Returns (%) gross of tax and fees
For the period to 29 Feb 2016
For the year ended 29 February
For last 5 years
Global Bonds
Other Global Funds
For the year ended 29 February
Aon Investment Update Page 9 of 14
Aon Hewitt
Bench FUM
Manager Fund mark ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
AMPCI NZ Fixed Interest 1 1,646 1.2 (4) 2.9 (2) 6.4 (7) 5.6 (5) 6.9 (3) 6.4 9.7 1.0 7.1 10.4 3.0 0.9 0.5 1.9 (1)
ANZ NZ Fixed Interest 1 1,491 1.3 (2) 2.9 (3) 6.9 (3) 5.5 (7) 6.7 (4) 6.9 9.0 0.6 7.6 9.5 3.0 0.7 0.6 1.3 (2)
Fisher NZ Fixed Interest 1 1,079 1.3 (1) 3.1 (1) 7.1 (1) 5.6 (6) 6.4 (5) 7.1 8.8 1.2 6.1 9.2 2.5 0.5 1.2 0.4 (5)
Harbour NZ Core Fixed Interest 3 148 0.8 (8) 2.3 (7) 6.8 (5) 5.7 (4) 6.8 7.5 2.8 7.2
Harbour NZ Corporate Bond 2 246 0.8 (9) 1.7 (9) 6.3 (9) 5.8 (3) 6.2 (6) 6.3 7.2 4.1 7.3 6.1 1.4 0.1 0.7 0.1 (6)
Milford Trans-Tasman Bond 5 273 0.6 (11) 1.4 (11) 4.8 (11) 4.8 9.8
Nikko NZ Corporate Bond 1 173 0.9 (7) 1.9 (8) 7.0 (2) 6.7 (1) 7.4 (1) 7.0 9.1 4.1 9.3 7.5 2.0 1.3 1.9 0.7 (4)
Nikko NZ Fixed Interest 1 255 1.2 (3) 2.5 (4) 6.9 (4) 6.2 (2) 7.3 (2) 6.9 9.1 2.8 8.6 9.1 2.4 1.2 1.1 1.1 (3)
Russell NZ Fixed Interest 1 105 1.0 (6) 2.3 (6) 6.8 (6) 5.3 (8) 6.8 8.1 1.1
Western NZ Core 4 215 1.1 (5) 2.3 (5) 6.4 (8) 6.4
Western NZ Core Constrained 1 89 0.7 (10) 1.6 (10) 5.5 (10) 4.4 (9) 4.3 (7) 5.5 6.0 1.6 3.5 4.8 1.3 -1.6 1.9 -0.8 (7)
Minimum 0.6 1.4 4.8 4.4 4.3 4.8 6.0 0.6 3.5 4.8 1.3 -1.6 0.5 -0.8
Median 1.0 2.3 6.8 5.6 6.7 6.8 8.9 1.6 7.3 9.1 2.4 0.7 1.1 0.7
Maximum 1.3 3.1 7.1 6.7 7.4 7.1 9.8 4.1 9.3 10.4 3.0 1.3 1.9 1.9
S&P/NZX NZ Govt Stock Index 1 1.3 3.1 6.4 4.8 5.9 6.4 8.6 -0.3 5.5 9.7 3.1
S&P/NZX NZ Corp A Grade Index 2 0.8 1.6 6.2 5.7 6.1 6.2 7.6 3.4 6.5 6.7 1.7
S&P/NZX NZ Govt/Corp A Index (50/50) 3 1.1 2.3 6.3 5.3 6.0 6.3 8.1 1.5 6.0 8.2 2.3
S&P/NZX NZ Comp Inv Grade Index 4 1.2 2.7 6.2 6.2
S&P/NZX NZ Corp/ASX Corp (50/50) 5
Bench FUM
Manager Fund mark ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
AMPCI NZ Cash 1 3,814 0.2 (4) 0.8 (5) 3.7 (6) 3.7 (6) 3.7 (3) 3.7 3.9 3.4 3.5 3.7 0.1 0.6 0.1 8.0 (1)
AMPCI NZ Short Duration 2 228 0.6 (1) 1.3 (1) 5.7 (1) 5.3 (1) 5.7 6.2 4.1 5.6
AMPCI Global Short Duration 1 179 0.1 (7) 0.6 (7) 3.7 (5) 4.5 (2) 3.7 5.5 4.3
ANZ NZ Cash 1 2,969 0.2 (6) 0.8 (6) 3.5 (7) 3.6 (7) 3.6 (4) 3.5 3.9 3.3 3.5 3.5 0.1 0.5 0.1 6.1 (3)
Fisher NZ Cash 1 771 0.3 (3) 0.8 (4) 3.8 (4) 3.9 (5) 3.8 (2) 3.8 4.1 3.8 4.5 3.0 0.4 0.8 0.4 2.3 (4)
Harbour Short Duration 1 41 0.3 (2) 1.0 (2) 4.1 (2) 4.1 (3) 4.1 4.3 3.9 0.2
Nikko NZ Cash 1 668 0.2 (5) 0.9 (3) 4.0 (3) 4.1 (4) 4.1 (1) 4.0 4.3 3.9 4.1 3.9 0.1 1.0 0.1 8.0 (2)
Median 0.2 0.8 3.8 4.1 3.7 3.8 4.3 3.9 4.1 3.6 0.1 0.7 0.1 7.1
S&P/NZX 90 Day Bank Bill Index 1 0.2 0.7 3.3 3.2 3.0 3.3 3.5 2.7 2.7 2.8 0.1
S&P/NZX Short End Swap Index 2 0.7 1.3 5.3 4.1 5.3 4.8 2.3 3.2 0.9
NZ Bonds
NZ Cash & Short Duration
For the period to 29 Feb 2016
For last 5 years
For last 5 years
Returns (%) gross of tax and fees
For the period to 29 Feb 2016
Returns (%) gross of tax and fees
For the year ended 29 February
For the year ended 29 February
Aon Investment Update Page 10 of 14
Aon Hewitt
Bench FUM
Manager Fund mark ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
Direct:
Fisher Property Fund 328 0.4 (2) 1.3 (2) 12.9 (1) 14.2 (1) 11.1 (1) 12.9 12.2 17.6 7.0 6.3 4.2
Trust Property Fund 103 0.6 (1) 3.8 (1) 10.5 (2) 9.2 (2) 8.9 (2) 10.5 7.9 9.3 9.6 7.2 1.6
Listed:
AMPCI Listed Property 1 20 -0.3 (7) 1.5 (7) 11.4 (1) 14.3 (4) 16.8 (4) 11.4 26.3 6.3 26.0 15.2 6.9 1.7 2.2 0.7 (3)
AMPCI Property Fund 2 126 1.1 (2) 4.3 (1) 10.3 (5) 10.3
ANZ Property Securities 1 152 0.4 (4) 2.2 (4) 10.1 (6) 15.4 (2) 17.5 (1) 10.1 26.9 9.9 26.1 15.4 7.4 2.3 2.8 0.8 (2)
ANZ Trans Tasman 2 392 1.3 (1) 4.2 (2) 9.3 (7) 15.9 (1) 17.0 (2) 9.3 28.8 10.6 29.6 8.8 8.0 1.3 3.1 0.4 (5)
Mint Real Estate Inv Trust 1 53 0.2 (5) 1.9 (5) 10.8 (3) 13.8 (5) 16.0 (5) 10.8 26.7 5.0 24.8 13.9 6.4 0.9 2.6 0.3 (6)
Nikko Property Securities 1 69 -0.1 (6) 1.7 (6) 10.4 (4) 13.5 (6) 15.7 (6) 10.4 27.7 3.8 22.3 15.7 6.9 0.7 1.1 0.6 (4)
Salt Listed Property 1 320 0.5 (3) 2.6 (3) 11.2 (2) 14.7 (3) 17.0 (3) 11.2 29.7 4.5 25.3 15.9 6.7 1.8 1.6 1.1 (1)
Minimum -0.3 1.5 9.3 13.5 15.7 9.3 26.3 3.8 22.3 8.8 6.4 0.7 1.1 0.3
Median 0.4 2.2 10.4 14.5 16.9 10.4 27.3 5.6 25.6 15.3 6.9 1.5 2.4 0.7
Maximum 1.3 4.3 11.4 15.9 17.5 11.4 29.7 10.6 29.6 15.9 8.0 2.3 3.1 1.1
S&P/NZX Property Index 1 -0.1 1.6 10.4 12.7 14.8 10.4 27.6 1.6 21.1 15.2 7.2
NZX/ASX Property Index 2 0.8 3.7 10.3 14.2 15.6 10.3 31.2 2.9 25.2 10.7 7.3
Bench FUM
Manager Fund mark ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol VA TE IR Rk
AMPCI Global Property Securities 1 113 -1.5 (4) -4.6 (4) -2.0 (1) 11.8 (1) 12.5 (1) -2.0 26.6 12.7 23.6 4.3 15.9 0.8 5.1 0.2 (1)
ANZ International Property 1 509 0.0 (1) -3.3 (1) -3.4 (2) 10.7 (2) 11.3 (2) -3.4 28.7 9.2 22.8 2.3 13.8 -0.5 2.7 -0.2 (2)
PATH Global Property 1 10 -0.8 (2) -3.3 (2)
Russell Global Listed Real Estate 1 41 -1.0 (3) -4.4 (3) -5.4 (3) -5.4
FTSE EPRA/NAREIT Index* 1 -0.1 -2.3 -2.6 11.0 12.0 -2.6 29.1 8.9 24.6 3.1 13.0
*UBS Global RE Index prior to June 2015
For last 5 yearsFor the year ended 29 FebruaryFor the period to 29 Feb 2016
NZ Property
Global Property
For last 5 years
Returns (%) gross of tax and fees
For the period to 29 Feb 2016
Returns (%) gross of tax and fees
For the year ended 29 February
Aon Investment Update Page 11 of 14
Aon Hewitt
FUM
Manager Fund ($m) 1 M Rk 1 Qtr Rk 1 Yr Rk 3 Yrs Rk 5 Yrs Rk 2016 2015 2014 2013 2012 Vol SR Rk Benchmark
Mercer Liquid Alternatives 94 -0.1 (1) -0.5 (3) 2.1 (3) 2.1 10.9 Cash + 3% to 5%
Nikko Multi-Strategy 171 -1.3 (5) -2.9 (6) 0.2 (6) 7.0 (5) 7.0 (3) 0.2 6.1 15.3 10.5 3.5 3.9 1.0 (2) 90 Day Bank Bill + 2.5%
Nikko Options 182 -1.0 (4) 1.7 (1) 18.7 (1) 11.0 (1) 8.8 (1) 18.7 4.8 9.9 13.1 -1.2 14.6 0.4 (4) 90 Day Bank Bill + 4%
NZAM Alpha 50 -0.7 (2) 1.0 (2) 3.2 (2) 7.2 (4) 3.2 11.9 6.7 OCR + 4%
NZAM Global 547 -1.3 (6) -2.1 (4) 1.3 (4) 7.8 (2) 5.4 (4) 1.3 9.2 13.2 8.1 -3.7 5.8 0.4 (3) OCR + 4%
Std Life GARS* 94 -0.7 (2) -2.6 (5) 0.3 (5) 7.3 (3) 8.2 (2) 0.3 13.6 8.4 8.0 11.0 4.3 1.2 (1) OCR + 5%
OCR + 5% 0.6 1.8 8.0 7.9 7.8 8.0 8.3 7.5 7.5 7.5 0.1
*GARS returns use a simulated hedge prior to March 2013
For the year ended 29 February 5 Years
Returns (%) gross of tax and fees
For the period to 29 Feb 2016
Global Alternatives/Absolute Return
NZAM Global
GARS Nikko
Nikko Option
0.0
5.0
10.0
15.0
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Retu
rn (
% p
.a.)
Risk (% p.a.)
5 Year risk/return
NZAM
Global GARS
Nikko
Nikko Option
NZAM Alpha
0.0
5.0
10.0
15.0
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Re
tru
n (
% p
.a.)
Risk (% p.a.)
3 Year risk/return
Aon Investment Update Page 12 of 14
Aon Hewitt
List of Managers
AMPCI AMP Capital Investors NZ Limited Guy Fisher
ANZ ANZ Investments Consultant
FSI First State Investments +64 4 819 4054
CPFM Castle Point Funds Management [email protected]
Devon Devon Funds Management
EC Elevation Capital Charles Macdonald
Fisher Fisher Institutional Consultant
FRK Franklin Templeton Investments +64 4 819 4050
Harbour Harbour Asset Management [email protected]
LMI Legg Mason Global Asset Management
Magellan Magellan Asset Management Limited
Mercer Mercer Investments
MGH MGH Investments
Milford Milford Funds
Mint Mint Asset Management
Nikko Nikko Asset Management
NZAM NZ Assets Management
PATH Pathfinder Asset Management
Russell Russell Investment Group
Salt Salt Funds Management
Std Life Standard Life Investments
Trust Trust Investments
Western Western Asset
Explanatory notes
1. Returns are before management fees and tax. All returns greater than 1 year have been
annualised.
2. Overseas Sectors - returns are in NZ$ and exclude the effects of currency hedging
on equities, but include the effects of currency hedging on global property and
absolute return funds.
3. Property - the returns in this table are influenced by the allocation to direct
investment and holdings in listed vehicles. In the case of direct investment, the
valuation approach and timing adopted by the manager will influence the returns.
4. Risk Statistics (all are annualised using monthly data):
Vol = Volatility = standard deviation of monthly fund returns
VA = Value Added = Return (fund) minus Return (index)
TE = Tracking Error = standard deviation of monthly Value Added
IR = Information Ratio = Value Added divided by Tracking Error
SR = Sharpe Ratio = [Return (fund) - Risk Free Rate]/ Volatility (Fund)
Wherever possible the risk statistics are calculated using each fund's actual benchmark.
Notes Contact information
Aon Investment Update Page 13 of 14
Aon Hewitt
About Aon Hewitt
Part of Aon plc, Aon Hewitt is the global leader in human resource consulting and outsourcing solutions. Our services focus o n helping organisations mitigate risk in their workforce and realise the untapped potential of their employees. We also help individuals maximise their wealth to e nable people to live the life they want.
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• Talent, leadership and employee engagement .
• Remuneration and incentives .
• Total rewards .
• Health and benefits.
• Global benefits.
• Aon KiwiSaver Scheme.
• Aon Master Trust.
With more than 30,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. Aon Hewitt is the global talent, retirement and health solutions business of Aon plc.
For more information on Aon Hewitt, please visit aonhewitt.co.nz.
Copyright 2016 Aon New Zealand The information used to compile this survey has been provided by the investment managers or is from publically available sources. The information is provided for general information purposes only. It is given without knowledge of your individual circumstances and should not be used as a substitute for you seeking your own independent professional advice. No liability will be accepted for loss resulting from reliance on information contained in this report which proves to be inaccu rate and/or incomplete.
Aon Investment Update Page 14 of 14