Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington Business Editor on Milford Asset Management's performance hit against competitors

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Jenee Tibshraeny: NZ Herald Wellington Business Editor on Milford Asset Management's performance hit against competitors · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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  Speaker 1: Gray is.
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  Speaker 2: With us with the latest on Paris and France in
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  Speaker 2: just a few minutes' time. Right now, though, Milford Asset
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  Speaker 2: Management is trying to allay investors' concerns about how it's
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  Speaker 2: performing up against its rivals. The Herald's Wellington business editor,
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  Speaker 2: Janaye Tibshraine, has been looking into this and is with us. Hi, Janaye.
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  Speaker 3: Hi, Heather.
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  Speaker 2: So what's the problem for them?
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  Speaker 3: Well, for anyone who is a Milford customer, they're probably
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  Speaker 3: scratching their heads thinking, in the past, Milford has been
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  Speaker 3: one of the strongest fund managers. Its performance has been
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  Speaker 3: very good. But over the past year, it's been notably lacklustre. So,
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  Speaker 3: for example, its growth fund has returned 3.4% after fees
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  Speaker 3: and before taxes. Its balance fund, 2.6%. Conservative fund, negative 0.6%.
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  Speaker 3: So these results are definitely behind its rivals. For example,
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  Speaker 3: in the growth funds, a lot of KiwiSaver growth funds
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  Speaker 3: are delivering returns of above 10%. So I guess, you know,
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  Speaker 3: Milford's expectations are high. Performance has been good. So this
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  Speaker 3: drop is definitely noticeable.
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  Speaker 2: Is this because they haven't invested sufficiently in the tech stocks?
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  Speaker 3: Yes. So I talked to Milford and they conceded that
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  Speaker 3: while they've been tracking AI, they probably didn't jump on
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  Speaker 3: it soon enough. And as people know, some of those
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  Speaker 3: tech stocks like NVIDIA and so on, Microsoft, they've really
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  Speaker 3: shot up. And They concede that it's pretty tough to
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  Speaker 3: get on that bandwagon really heavily now that they've taken off.
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  Speaker 3: So that's definitely a factor. And the other thing that
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  Speaker 3: they pointed out was because Milford's strategy is to be
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  Speaker 3: an active manager, they're picking stocks, buying and selling, rather
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  Speaker 3: than tracking an index, they they're trying to take a
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  Speaker 3: slightly lower risk sort of approach. So if it is
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  Speaker 3: a tech bubble and everything comes crashing down, Milford is
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  Speaker 3: saying that its funds should perform much better than some
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  Speaker 3: of its rivals that really just track the market. And
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  Speaker 3: if you're tracking the markets, it depends on what you're tracking,
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  Speaker 3: about 35% of the market could be taken up by
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  Speaker 3: those tech stocks just because they are becoming so big. So,
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  Speaker 3: you know, it's pretty tough as an investor. You're looking
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  Speaker 3: at this, you're thinking, is this really good enough or not?
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  Speaker 3: So I guess you really do have to lift the
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  Speaker 3: hood and assess what approach you think is best, whether
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  Speaker 3: it's good to have active management or more exposure to tech.
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  Speaker 2: Yeah, that's actually a fair point.
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  Speaker 1: Hey, thank you, Janae.
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  Speaker 2: I appreciate it. As always, Janae Tibbs-Rainey, the Herald's Wellington
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  Speaker 2: Business Editor.
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