Lifetime’s risk management process combines:
- Stress testing to support scenario analysis.
- Liability matching to match long-term investment objectives with commensurate assets.
- Recognition for the impact, fund structure and jurisdiction have on tax obligations and net investment returns.
- Sustainable investing: acknowledging screening to support positive outcomes for the society and the environment can come at a cost to performance.
- Minimising fees through the use of index investment funds and/or low-cost active funds to achieve customers benefiting economies of scale.
- Constantly modelling the long-term performance characteristics of the principal asset classes.
- Active risk management (derivative overlay) of growth assets, as measured by standard deviation versus long-term benchmark performance.
The Superannuation Master Trust
Lifetime has restructured the Master Trust investment portfolio to reflect a high conviction, actively managed, multi-manager approach consistent with the management of all Lifetime products.
Lifetime sets the strategic and tactical benchmark asset allocations, the environmental, social and governance (ESG) policies, selects the appropriate comparative indices, and the underlying assets which are a combination of passively and actively managed investment funds.
The current underlying managers actively managed by Lifetime include:
NZ Fixed Interest and Cash
Fisher Funds Management provides the Master Trust with exposure to New Zealand Fixed Interest and Cash. Fisher Funds have a 24-year track record, a conviction-based approach to investment management and a clear and practical approach to responsible investment. Fisher Funds is a signatory to the United Nations sponsored Principles for Responsible Investment (PRI).
Global Fixed Interest & Australian Equities
Macquarie Asset Management have been selected to manage the Master Trust's Global Fixed Interest and Australian Equities. Macquarie is an established global investor with both proven international fixed interest and Australian equity capability. Macquarie is a signatory to the United Nations sponsored Principles for Responsible Investment (PRI).
The hedged Global Fixed Interest Index Fund, the Master Trust has exposure to, has been certified by the Responsible Investment Association of Australasia.
Macquarie uses a factor-based approach to invest in Australian Equities, mapping to the top 200 companies while actively managing over and underweight positions to add incremental value after fees and includes investing in initial public offerings. Environmental, Social and Governance characteristics are integrated into the underlying investment manager’s investment process.
New Zealand Equities
Simplicity NZ Limited presents a practical, low-cost option for the Master Trust's New Zealand equity exposure through its index-tracking New Zealand Share Fund. Simplicity is not for profit and has an embedded ESG philosophy championed by its founder.
The Master Trust's international equities exposure is obtained through funds managed by Mercer. Mercer is a part of MMC, a Fortune 250 company. The Mercer network gives the Master Trust investors access to a global investment capability within a tax-effective, global equity index fund designed for New Zealand investors. Lifetime has currently split the portfolio 50% hedged and 50% unhedged at this time. The underlying manager of the Mercer Socially Responsible Overseas Shares Index Portfolios is Legal & General, a leading global financial services company established in 1836.
New Zealand Property
Kernel Wealth is a relatively new manager providing simple exposure to listed New Zealand Commercial Property managed to index weightings at index reflective pricing. This is an important but narrow industry sector in which Kernel represents a good cost and value balance.
As a manager, Kernel offsets their carbon emissions and is a certified Living Wage Employer. Kernel funds are index tracking, which determines the core sustainability/ESG factors.
Australian Listed Property
Vanguard is the world’s second largest investment manager with over $7 trillion under management. The Master Trust's Australian property exposure is maximised by index replication achieved through investment in an Exchange Traded Fund (ETF) managed by Vanguard.
Global Listed Property
Consistent with the Australian property exposure, Lifetime has appointed State Street Global Advisors to provide investment management services under an ETF structure to the Master Trust members. The index tracked incorporates ESG into its construction.