Look! See-through investments

Photo / Nicola Topping

Guardian Trust informed me this morning that it "would like to make some relevant clarifications" in regards to an earlier story I wrote about the Asteron KiwiSaver fund.

So, in the interests of clarity, here they are:

"The Asteron KiwiSaver Scheme exposure to the Guardian CashPlus Mortgage Units Fund is less than 1 per cent overall, with the Asteron Capital Fund exposure now at 5.1 per cent, and this exposure is reducing all the time. Furthermore, Guardian Trust has indemnified the assets of the Guardian CashPlus Mortgage Units Fund and guarantees no loss of capital."

All clear now? That's good.

The facts revealed in the story, cited directly from the Asteron prospectus, were hardly controversial but an interesting enough example, I thought, of how frozen assets are slowly melting inside KiwiSaver funds - Asteron is not the only one.

However, when the Guardian CashPlus fund froze some time ago, along with several other mortgage and property funds - offered, for example, by AMP, AXA and Tower - many investors were surprised to discover what was really inside their investments. Maybe that's because they never really looked or, if they did, the contents were difficult to identify.

The funds management industry has struggled with the concept of transparency mainly, or so the argument goes, because managers want to guard their 'intellectual property'.

Competitors probably would make use of real-time portfolio information but a list of recent historical holdings is most likely good enough for investors. Some managers are not so precious about 'lifting their skirts'.

A new fund launched this week by Auckland-based boutique operation Pathfinder, for instance, shows the way. Appropriately, the Global Water Fund takes transparency to heart.

David Chaplin