Managed funds

[Shareguy]

Some of you might find this interesting. They also do comprehensive travel/House insurance.

https://www.mas.co.nz/investments/fund-performance/

[entrep]

https://discoveryfunds.co.nz/assets/Newsletters/Discovery-June-2026.pdf

finding their way again

[BlackPeter]

https://discoveryfunds.co.nz/assets/Newsletters/Discovery-June-2026.pdf

finding their way again

Always dangerous to assess a randomtrend based on data of the last month ... but hey, this is what analysts are doing if they forecast a shareprice, so why shouldn't we do the same thing?

How are they set up when AI bust, Elon bust and / or Trump bust and WW III bust are dooming?

[Shareguy]

Always dangerous to assess a randomtrend based on data of the last month ... but hey, this is what analysts are doing if they forecast a shareprice, so why shouldn't we do the same thing?

How are they set up when AI bust, Elon bust and / or Trump bust and WW III bust are dooming?

Agree, Discovery has been up for three months in a row.

[Shareguy]

There is a possible windfall coming if Corp travel relists.

Discovery say "CTD's relisting has been delayed until August, we took the decision to write the investment down to close to zero."

Last sp before delisting was $16 a share.

https://www.businessnewsaustralia.com/articles/corporate-travel-management-yet-to-finalise-financial-statements-as-uk-accounting-scandal-drags-on.html

[Basil]

Today I asked myself a question. On the evidence of past performance over 5 years are PIE funds with their active management approach earning their keep in terms of their quite expensive 1.8% per annum management fee relative to a similar low cost ETF which is also a PIE ?

Many will know without fear or favour I always use the 5 year average return as this consistent approach gives an idea of a share or funds performance relative to others over a decent amount of time.

Here's PIE's funds returns https://www.piefunds.co.nz/Performance  (Blue is my suggested alternate as the most relevant alternative from Smart Shares low cost ETF)
A few of their funds really stand out as being appalling over a 5 year period.
Australasian Growth2 0%  Smart Australian mid cap 8.95%  (Comment, a really shocking 8.95% underperformance to a simple mid cap ETF)
Dividend growth  4% Smart Australia dividend 10.03% 6 % underperformance for PIE funds only a third of which is explained by PIE funds fees.
Global Growth 5.2%  Smart Shares US500 ETF 16.86%  A shocking 11.66% underperformance and evidence that PIE are destroying serious value for their investors and have no expertise of any kind worth paying for with Global growth
Growth UK and Europe 1.7%  Smart Shares Europe ETF  11.27%  Another shocking 9,57% per annum underperformance.  No expertise and destroying value at a high rate of knots
The best of them is emerging markets at 12.2% after fees.  Smart Emerging Markets 10.11%
  The only fund where PIE seem to have earned their fees and demonstrated it is possible they can add value.

Smart shares performance table
https://www.smartinvest.co.nz/funds-and-performance/etf-performance

Conclusion.  Its really hard to beat a low cost ETF and the evidence suggests PIE funds are busy eating FAR too much of the PIE themselves at investors expense and PIE funds performance is generally far below ETF's.

This is not an attack on PIE funds.  The relative performance speaks for itself and in my opinion is quite shocking in many instances.  PIE management do not appear to be earning their fees, in fact the exact opposite is the case, high fees while they generally destroy serious amounts of value over time relative to what could have been earned in a simple low cost ETF.   Their lower cost Kiwisaver funds returns, all of them, are also appallingly low over the last 5 years.
Disc: No investment in either PIE funds or Smart shares funds.  I could not with good conscience ever recommend PIE funds to anyone.
Fisher Funds are probably even worse but they set an extremely low bar,

[Dolcile]

Yep just buy the global index via Kernel, InvestNow or Simplicity.  Throw them a few bps to do it.   

The only active manager for nz/au equities that seems to consistently do well is Salt. 

[Shareguy]

Your post Basil peaked my attention and got me thinking as well.

Managed funds are not for everyone they are not about playing it safe—it's about taking calculated risks and in Pie funds case on high-growth opportunities. If you're looking for more than just tracking the market or a diversified actively managed growth fund Pie Funds have a good track record of doing just that over the longer term. Pie claim to have over $100m of their own staff/directors invested along side in the funds, a pretty good incentive I reckon.

I agree looking at the 5 year comparison the performance is not that good. Their flagship Aust growth fund which is far the largest I note over the 5 year period you have chosen has a return of 6 percent or 3 years 19.3 percent pa. The Emerging I year return a very healthy 28 percent.

Picking individual stocks is fraught for many investors who have lost lots of their money on poor stock selection with lack of diversification resulting in capital loss. The NZX has more than its fair share of disappointment's. It's no wonder that NZ investors have such a lot of money in property. Our own NZ super, ACC and others only have a small percentage in the NZ index for a reason.

Before investing in a fund, investors need to ask themselves

Do I want active management instead of index tracking?
Am I comfortable with volatility for the potential of higher returns?
Can I invest for at least 5+ years without needing quick access to my money?
Am I willing to pay higher fees for the potential of outperformance?

If you answer yes to all of those questions then a managed fund is a good place for SOME of your capital in my opinion. And for some people realisation that they should not invest in a managed fund.....

If you look at the longer term Pies returns are acceptable in my opinion.

The returns from Pie funds Australian funds since inception

Aust growth 13.7 percent pa since inception 2007

Aust growth 2 10.7 percent since inception 2015

Aust dividend 13.8 percent since inception 2011

Aust Emerging 19.1 percent since inception 2013

All over 10 percent which is my own personal target.

I agree Basil that it's really hard to beat a low cost ETF looking at the 5 year comparison. It's especially good for those who can't meet managed funds minimum entry. Even Buffett claims it's the way to go.

For me I'm happy with the longer term performance of Pie Funds but agree that their performance has been mixed over the last 5 years. For me it's not just performance it's knowing your money is in good hands. I'm not worried about dodgy people or losing the lot. It's about getting a good sleep and making the most of life whilst others are working on your behalf.

Anyway thanks Basil for your thought provoking post.

Disc/ I'm not suggesting anyone invests in Pie Funds or any managed fund.
But if you do, diversification is still key and I would spread it out between Funds and managers.

[Basil]

Thanks Shareguy you make some good points about their longer term performance and spreading your risk around.

I guess one of the risks / focus points incumbent within my 5 year standard analysis term is it encapsulates a lot of the post Covid recessionary period.
That shows how resilient a fund managers stock selection process has been in tougher times and it seems clear to me that PIE's approach has not been in defensive sectors in tougher times.  Perhaps it was simply too difficult to pivot their portfolio with the size of the positions they had or perhaps they underestimated how enduring post Covid headwinds would be ?

One of my foundational investment beliefs is that the very best guide we have, (no matter how imperfect it is), to future performance is the most recent performance.    Hopefully we will return to better economic conditions and a lower level of global geopolitical tension going forward and growth stocks will start shining again.

Its only been going for 3 years so its very early days but this ETF with its ultra low fees and PIE structure so they handle the FIF compliance looks pretty good to me and seems to be attracting a lot of support from the investment community. https://simplicity.kiwi/investment-funds/funds/unhedged-global-share,