6 December 2017
Brent Sheather
[email address]
Dear Mr Sheather
Reference: 0050990
Official Information Act request
Thank you for your request of 14 November 2017, made via the FYI website, which
asked for the following information under the Official Information Act 1982 (the Act):
I am considering writing a story on the investment performance of ACC and
would like the following information:
•
Details of management fees and performance fees payable by ACC
on its various investments with fund managers
•
The pre-tax, post-fee performance of the major asset classes ie NZ
bonds, global bonds, NZ shares, Australian shares and global shares, over 1
year, 3 years, 5 years and 10 years
•
Total investment management fees payable by ACC in the 12 months
ended June 2017 and the weighted average funds under management in that
period so that I can work out the average fees paid in percentage terms.
On 15 November 2017, you discussed your request with a member of ACC’s
Investment Office and, after some discussion, revised your request as follows:
Noting the difference in asset allocation. Why is ACC more invested in
bonds? I am sure there is a good reason for this and the bil ion dollars we
manage for retail investors is 40% invested in bonds but I would just like
to make sure that readers know why ACC has a more conservative
strategy than the Super Fund.
Could I see performance by asset class for 1, 3, 5 and 10 years and the
benchmark performance with the benchmark identified. Looking at the
annual report the benchmark doesn’t seem to be identified.
The annual report highlights the fact that fees, as a percentage of total
assets, are very low but this is a little disingenuous because most of the
portfolio is internal y managed. A more relevant figure would be
investment fees as a percentage of external y managed funds and I would
be hopeful that this figure would include transaction costs and
performance fees where relevant.
The Super Fund has told me its rationale for passive so it would be helpful
if ACC could advise its rationale for active.
On 16 November 2017, you agreed to the following approach regarding your
requests to date:
You wil review the 2017 ACC Annual Report to see if there is sufficient
information in there to answer your first and fourth bul et points below. To
be clear, ACC wil not work on providing information on either of these
points at this moment. As discussed, if you feel that the annual report
does not sufficiently answer your question, then we would like to suggest
that you have a discussion with our [Investment Office]
.
ACC will review the second and third bul et points below and respond
within normal OIA guidelines.
ACC wil disregard the questions raised via the FYI website.
This response has been prepared based on the approach agreed on 16 November
2017.
Our response Please find information on the performance by asset class for 1, 3, 5 and 10 years
and the benchmark performance, with the benchmark identified, at
Appendix 1.
Please note that performance is calculated pre-costs, post withholding tax.
The external management costs include all base and performance fees paid in the
June 2017 year. The cost of external management in aggregate is 0.38%; Global
Equities costs 0.41%; Global Bonds costs 0.26%; and Australian Equities 0.51%.
Please note transactional costs are incurred within the portfolios, and therefore the
fund’s performance. This is consistent with the calculation methodology adopted for
the same calculations within the annual report.
Questions or concerns If you have any questions about the information provided, ACC wil be happy to work
with you to answer these. You can contact us at [email address] or in writing to
Government Services, PO Box 242, Wellington 6140.
You have the right to complain to the Office of the Ombudsman about our decision to
withhold some of the information. You can call them on 0800 802 602 between 9am
and 5pm on weekdays, or write to
The Office of the Ombudsman, PO Box 10152,
Wellington 6143.
Yours sincerely
Government Engagement & Support
Appendix 1
1 Year
3 Year
5 Year
10 Year
Bench
Bench
Bench
Bench
Asset Class
Benchmark
Actual
Actual
Actual
Actual
mark
mark
mark
mark
35% S&P / NZX 5 Year Government
NZ Long Bonds
Bond Index, 65% S&P / NZX Mid
0.72%
-1.31%
7.84%
7.06%
5.82%
4.61%
8.72%
7.77%
Long End Swap Index
NZ Index Linked
S&P / NZX Index Linked Government
-0.40%
-0.47%
5.96%
5.66%
4.11%
3.28%
6.38%
5.90%
Bonds
Bond Index
Bloomberg Barclays Global
Global Bonds
Aggregate Credit Total Return Index
1.71%
-0.55%
6.59%
5.39%
6.34%
5.55%
9.44%
7.35%
(unhedged)
70% ACC Custom NZ Large-Cap 50
NZ Equities
Index Gross; 30% ACC Custom NZ
13.20%
11.02%
16.23%
14.80%
19.01%
17.89%
7.72%
6.45%
Mid-Cap 100 Index Gross
70% S&P / ASX 100 Bank
Adjustment Factor Index Total
Australian Equities
Return: 30% S&P / ASX Small Cap
9.96%
11.81%
8.79%
8.33%
10.54%
11.04%
5.40%
2.59%
Ordinaries Accumulation Index
(unhedged)
MSCI Al Country World Index with
Global Equities
gross dividends reinvested
16.97%
16.16%
13.16%
11.55%
14.61%
13.37%
6.07%
4.67%
(unhedged)
