As a manager-of-managers, Mercer selects specialist investment managers for each sector, thereby delegating the selection of securities to those managers.
We have more than 100 staff involved in manager research which allows us to track over 5,400 managers and more than 26,000 investment strategies across the globe. Each investment option is carefully constructed and we monitor every manager on behalf of our investors.
Within our global shares portfolio, we mostly engage managers by way of an investment management agreement, which allows Mercer to specify the investment policy. This policy requires managers to exclude companies which manufacture controversial weapons.
Our funds also invest in other pooled funds to increase diversification and investment efficiency. This includes investment in exchange traded funds (‘ETFs’), which provide cost-effective access to a basket of securities set by the relevant index.
In these circumstances, the managers of the underlying funds set the guidelines for these funds and, as such, the exclusions which we apply elsewhere may not occur at this level.
To address the potential for unintended, indirect exposures to excluded companies identified within our policy, we have initiated a review of our current approach. The key objective of this review is to further strengthen our ability to control the exposure to specific sectors and companies. Our review may also consider whether to exclude any sectors additional to the controversial weapons referred to above.
As with any investment it is important that it is suitable to your personal circumstances. It is important that you seek advice from an appropriately authorised financial adviser.
We will continue to evaluate options available to you. More information about the options can be found online at www.mercerfinancialservices.co.nz or on the disclose register.
We are transparent about how and where we invest. You can find information about each of our managers and the underlying companies on the disclose register managed by the Financial Markets Authority. We encourage investors to take an interest, review their own investment choices and ask questions about where and how their money is invested.
An investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day.
A benchmark return used to measure performance. For example, the NZX 50 is often used to measure the performance of New Zealand shares.
Funds from many investors (individual and corporate) put into a large fund spread across many investments and managed by other professionals. This way of investing means that you don’t buy shares directly in companies, but are exposed to these indirectly through pooled funds.
A general term applied to all shares, debentures, notes and bonds.
For more terms used in this update please read ABC’s of useful terms.