Russell Investments expands NZ fund suite and reduces fees, targeting financial advisers and institutional investors

  • Launching low-cost, NZ-domiciled Russell Investments Sustainable Global Shares Fund and Russell Investments Hedged Global Listed Infrastructure Fund
  • Significantly reducing management fees for Russell Investments Portfolio Investment Entity (PIE) funds
  • Enhancing tax efficiency and lowering in-fund costs for NZ investors in Russell Investments Global Shares Fund

AUCKLAND, 13 December 2021 —  Russell Investments has announced significant enhancements to its New Zealand fund range that are designed to support expansion into the local financial adviser and small institutional market. Building on its leadership position among larger institutional investors in New Zealand and the South Pacific, the firm has revamped its suite of multi-manager Russell Investments PIE funds to further strengthen the investment and value proposition for local financial advisers, their clients and smaller institutional investors.

“We have significantly enhanced our local fund offering through lower costs, improved tax efficiency and the introduction of new funds,” said Matt Arnold, Director, New Zealand at Russell Investments. “The funds, which are managed by some of our industry’s most highly regarded global firms, provide local investors with low cost, efficient access to a range of core asset classes.”

Two new funds

Russell Investments’ suite of New Zealand-domiciled funds is offered locally through a partnership with fund host, Implemented Investment Solutions (IIS).

  • The Russell Investments Sustainable Global Shares Fund is based on the firm’s proprietary carbon-intensity reduction strategy and favours companies with strong Environmental, Social and Governance (ESG) characteristics. This index-oriented global shares fund targets reduced carbon emissions and an improved ESG profile. The fund also aims to reduce exposure to fossil fuel reserves relative to the benchmark index (MSCI ACWI). It provides cost-effective exposure to both emerging and developed markets stocks covering about 85% of the global listed investable market. The fund, which will be one of the lowest cost equity funds available to local investors, will be available in both $NZ currency-hedged and unhedged formats.

    “Our sustainable global shares fund will offer a one-stop shop for New Zealand investors looking for low-cost, diversified global-equity exposure,” said Auckland-based Scott O’Ryan, Business Development Manager. “Built specifically for local investors, and including exposure to both developed and emerging markets, it is designed to improve tax efficiency relative to commonly used Australian index funds, while also making meaningful steps to reduce the carbon footprint and improve the ESG characteristics of their portfolios.”
  • The Russell Investments Hedged Global Listed Infrastructure Fund provides actively managed, diversified exposure to the listed infrastructure sector, which historically has offered investors a unique blend of income and capital growth. This fund is expected to be available in Q1 2022.

    “Global listed infrastructure provides investors with exposure to a sector of the global economy that is experiencing long-term secular growth,” O’Ryan said. “Almost every country on earth has an infrastructure deficiency and the sector stands to benefit as governments and private companies make significant long-term investment commitments.”

Both new funds will join Russell Investments’ PIE suite, all of which are available on InvestNow as well as adviser-friendly platforms including MMC Wealth Administration, NZX Wealth Technologies, OneAnswer Portfolio Service and Consilium.

Russell Investments’ multi-manager PIE funds, which are already widely used by institutional investors in New Zealand and the South Pacific, draw on the firm’s four decades of experience in building globally diversified portfolios. “With extensive capabilities spanning manager research, portfolio management and implementation, Russell Investments brings its global capabilities to local investors through a range of differentiated investment offerings,” Arnold said.

Lower fees

New Zealand investors also can benefit from lower management fees, which came into effect on 1 November, across Russell Investments’ range of PIE funds.

“We’re very happy to deliver significant fee reductions for NZ investors, mostly by leveraging the firm’s global scale and buying power,” Arnold said. “We plan on increasing our engagement with the local financial adviser community, as well as smaller institutional investors, who we think will find these funds to offer compelling value.’

MANAGEMENT FEE
(EXCLUDING GST)
ESTIMATED TOTAL ANNUAL FUND CHARGES (INCLUDING GST)
Russell Investments New Zealand Shares Fund 0.70% 0.79%
Russell Investments Global Shares Fund 0.80% 0.89%
Russell Investments Hedged Global Shares Fund 0.80% 0.92%
Russell Investments New Zealand Fixed Interest Fund 0.40% 0.49%
Russell Investments Global Fixed Interest Fund 0.47% 0.59%
Russell Investments Sustainable Global Shares Fund1* 0.25% 0.34%
Russell Investments Hedged Sustainable Global Shares Fund1* 0.25% 0.36%
Russell Investments Hedged Global Listed Infrastructure Fund2* 0.85% 1.09%

* No application monies are currently being sought and investors cannot currently apply for units in the Russell Investments Sustainable Global Shares Fund, the Russell Investments Hedged Sustainable Global Shares Fund or the Russell Investments Hedged Global Listed Infrastructure Fund. If an offer of units is made, it will be made in accordance with the Financial Markets Conduct Act 2013.

Improved tax efficiency

In addition to lower management fees, the Russell Investments Global Shares Fund, which provides exposure to international shares through an actively managed multi-manager approach, now offers improved tax efficiency and lower in-fund costs. By changing the implementation model to one of direct implementation, Russell Investments has removed a layer of in-fund costs, while also providing taxable investors with the opportunity to reclaim tax credits that could not be claimed under the previous feeder fund model.

“Based on historical data, we estimate that taxable fund investors (by claiming tax credits) will stand to gain by up to 0.3% per annum ” Arnold said. “In addition, removing the feeder fund structure substantially reduces in-fund-costs, which further benefits fund investors.”


1 Fund expected to launch in December 2021.
2 Fund expected to launch in Q1 2022
3 Based on the last 5 years’ data, savings through the claiming of tax credits are estimated to approximately 0.30% p.a

 

For more information, please contact Matthew Arnold +64 9 359 3576 (marnold@russellinvestments.com)

About Russell Investments

Russell Investments is a leading global investment firm providing tailored solutions and services to institutions and individuals through financial intermediaries. Russell Investments is dedicated to improving people’s financial security, leveraging an 85-year client-centric heritage rooted in investment innovation. Russell Investments has NZD$478.5 billion in assets under management (as of 30 September 2021) and NZD$4.3 trillion in assets under advisement (as of 30 June 2021) for clients in 32 countries. Headquartered in Seattle, Washington, Russell Investments operates through additional offices in major financial centres such as New York, London, Tokyo and Shanghai.

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