Vanguard Melbourne wins $400m from NZ

Vanguard’s Melbourne office will service a NZ$400 million plus global equities mandate from ASB Investments, a New Zealand subsidiary of the Commonwealth Bank of Australia, replacing AMP Capital.

According to Ainsley McLaren, ASB head of investments, AMP has been replaced as the global equities index manager for its flagship Easyplan and Superannuation master trusts. Last week the group also exited its 30 per cent holding in the NZX-listed AMP Investments World Index Fund (WINZ) transferring assets worth NZ$114 million to Vanguard. “We took most of it in the underlying stock,” McLaren said. In total Vanguard now manages NZ$420 million for the ASB group, which invests solely in index products. McLaren said new investment tax rules that came into force last year and the introduction of KiwiSaver were behind the manager shake-up. Prior to the tax changes, passive funds that invested in shares listed in seven approved countries – the so-called ‘grey list’ – were exempt from capital gains tax. The AMP index funds, including WINZ, were structured around an index composed of the grey list countries. “We wanted a full MSCI exposure now rather than just the ‘grey list’,” she said. A spokesperson for AMP Capital said the group is considering options to remodel its listed WINZ product and may adopt a broader MSCI benchmark or an enhanced passive approach later this year. McLaren said ASB has also replaced AMP Capital as the manager of its New Zealand equities mandate with the funds management arm of its parent company, Colonial First State. “We’ve also changed the benchmark [from NZ only] to an Australasian index – a blend of the NZX 50 and the ASX 200,” she said. ASB’s sister company, Sovereign, is also remodelling its manager line-up.