Symposium NZ 2015 - Resources Kit

Symposium facilitates debate on the three pillars of portfolio construction – markets, strategies and investing. Established in 2011, it is THE NZ investment markets and strategies conference of the year. The jam-packed, two day program, featuring 20+ leading investment professionals, was in effect two programs in one. Day one focused on the key drivers of and outlook for the markets. Day two focused on developing robust strategies to meet client objectives.

Quicklinks

This online Resources Kit is a key feature of the Symposium 2015 program (in fact, all our programs feature an online Resources Kit). It enables all Members (whether or not they were part of the live "studio audience" on the day) to "attend" Symposium 2015. It's an invaluable set of continuing education material.

This Resources Kit includes all the videos, podcasts, slides and papers for each session, along with a link to the delegate Workbook, and the Backgrounder.

Session titles

A list of all the sessions from the jam-packed program;

Session resources

Videos, podcasts, slides and papers for all 20 sessions.

Workbook

Download it and print it, use the checkboxes on pg 6-7 to tick off sessions as you "attend".

Session titles

Symposium 2015 was in effect, two programs in one. is Day one focused on the key drivers of and outlook for the markets. Day two focused on developing robust strategies to meet client objectives. In order:

Day 1 - Markets

Day 2 - Strategies & Investing

Session resources

Day 1 - Markets

About the 
program

Symposium facilitates debate on the three pillars of portfolio construction – markets, strategies and investing. Established in 2011, it is THE NZ investment markets and strategies conference of the year. The jam-packed, two day program, featuring 20+ leading investment professionals, was in effect two programs in one. Day one focused on the key drivers of and outlook for the markets. Day two focused on developing robust strategies to meet client objectives.

Critical Issues Forum 1

Facilitating debate on the markets, strategies and investing
PortfolioConstruction Forum Publisher and Symposium NZ 2015 Moderator,
Graham Rich, opened Symposium NZ 2015 in his usual thought-provoking (and entertaining) way, highlighting key issues to consider over the jam-packed, marathon program.

Resources >

Critical Issues Forum 2

The global economy is firing on all cylinders
The outlook for the global economy is unambiguously positive. We have reformist governments in the world’s most populous nations and the developed world has finally recovered from the WFC (Western Financial Crisis). At long last all the regional economic cylinders are firing in unison and secular stagnation is yesterday’s story.

Jonathan Pain, Editor, The Pain Report (Sydney)

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Critical Issues Forum 3

Desperate central banks are causing Pollyanna asset prices
Slow growth is an old story. The new story is that world is finally beginning to re-balance - a process that unfortunately will take another 20 years. The first phase is that we think we are getting out of the woods of stagnation and deflation and already financial markets are getting way ahead of that story. Central banks are making that situation much worse with their belated asset purchases, zero interest rates and, in China's case, the accelerated opening up of domestic markets in order to qualify the yuan as a reserve currency. All of these well-intended policies are causing bubbles and worrisome distortions to asset prices. Negative bond yields and tight credit EU spreads are the tip of the iceberg. In that environment, investors should resist the temptation to chase yield, especially in structured 'yield' products, and must avoid lending to debtors that will be most vulnerable to market backlash when credit quality and equity value deteriorate and reality sets in.

Dr Robert Gay, former senior economist with the US Federal Reserve (NY)

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Critical Issues Forum 4

China’s property bubble is set to burst!
A credit-fuelled property bubble enabled China to maintain its incredible run of growth through the global financial crisis (GFC). However, now China has to deal with a massive excess supply of property that is causing construction activity to contract along with a range of other linked sectors in the Chinese economy, as millions of homes lie vacant. This is unlikely to be ‘just another property cycle’ in China. The bursting of China’s property bubble poses a major risk to both the country’s stability and the global economy.

Sam Churchill, Head of Macro Research, Magellan Asset Management (Sydney)

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Critical Issues Forum 5

The patient is out, but the doctor is (all) in
Divergences in global economic and policy outcomes have important implications for markets around the world. US growth is recovering, and it is very likely the Fed will increase rates later this year. Meanwhile, in Europe, weak growth and the threat of deflation have prompted the ECB to launch unprecedented monetary policy support. This policy divergence has directly influenced asset prices across the globe with implications for stocks, bonds and currency markets.

David Fisher, MD & Product Manager, PIMCO (Newport Beach)

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Critical Issues Forum 6

Get used to low interest rates
World-wide low interest rates are not a temporary phenomenon. The world has changed and it is highly likely that the current low rate environment will be with us for decades. Long term low interest rates means that most equity and property valuations are not stretched. Getting used to low rates will be a critical adjustment that all investors will need to make in the coming years.

Tim Farrelly, Principal, farrelly's Investment Strategy

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Critical Issues Forum 7

House prices are a blunder of our governments
High and rising house prices in Auckland hog the headlines. The tax regime and bank lending practices are largely irrelevant. Instead, increasingly unaffordable house and land prices result from the collision of two, no doubt individually well-intentioned, sets of policies. Tight restrictions on land use crimp the supply of the sort of houses most people want to live in, and very high target levels on non-citizen inward migration persistently boost demand for housing. One or other policy might make sense, but together they represent a very costly blunder.

Michael Reddell, retired Special Adviser Economics, RBNZ (Wellington)

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Critical Issues Forum 8

Don’t ignore the tech sector for growth investing
Returns in defensive equity yield and income sectors have been outsized as bond yields have fallen. Growth sectors have under-performed. And yet earnings and revenue growth for most growth sectors has continued. Globally, technology shares are cheap on a relative basis. Until recently NZ investors have had few investment choices in the local technology industry. However, a myriad of tech companies have raised capital and listed on the stock exchange. Tech investing has significant challenges with rampant competition and rapid obsolescence, at the same time it remains the fastest growth segment and today it appears to have attractive valuations.

Andrew Bascand, MD & PM. Harbour Asset Management (Auckland)

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Critical Issues Forum 9

Oil price moves are a cyclical risk, adding volatility to markets
One of the most important events of 2014 for investors was the dramatic collapse in the oil price. A short-term recovery appears unlikely and, more importantly, the long term equilibrium price is now likely to be lower. This will have both cyclical and structural impacts – for example, lower oil prices are hitting a number of producing countries budgets hard (Russia being the most widely reported) while Brazilian equities are down due to weaker oil prices. Overall, portfolios must be repositioned for increased volatility.

Nick Langley, Co-CEO & Co-CIO, RARE Infrastructure (Sydney)

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Critical Issues Forum 10

Investing in NZ is a big challenge for an Au-based, Kiwi investor
Despite a genuine desire to invest in NZ on behalf of a substantial Australian superannuation fund, after several years of trying, no money has been invested. The capital being sought is too small scale, fund manager fees are too high, and genuine diversifying opportunities too few. Once those hurdles are overcome, NZ will be a more attractive destination for institutional capital”.

Sean Heneghan, CIO Multi-Asset, AMP Capital Australia (Sydney)

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Critical Issues Forum 11

Portfolio construction implications panel 1 - Markets
Our Faculty debated their high conviction ideas on the drivers of and medium-term (2 to 3 year) outlook for the markets.

Jonathan Pain, Editor, The Pain Report (Sydney)
Sam Churchill, Head of Macro Research, Magellan Asset Management (Sydney)
Tony Hildyard, Country Head NZ, PIMCO (Wellington)
Tim Farrelly, Principal, farrelly's Investment Strategy
Nick Langley, Co-CEO & Co-CIO, RARE Infrastructure (Sydney)
Andrew Bascand, MD & PM. Harbour Asset Management (Auckland)
Sean Heneghan, CIO Multi-Asset, AMP Capital Australia (Sydney)

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Critical Issues Forum 12

NZ is not a rock star economy. Will it ever be?
New Zealand has plummeted down the world income per capita rankings from third place in the 1950s to 23rd place in 2015. Successive Governments have done little in the past couple of decades to reverse that decline. Why have we failed to regain our earlier position? Three different reasons are proposed and debated.

Prof Robert MacCullouch, Auckland University Business School (Auckland)

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Critical Issues Forum 13

Economic growth is the answer, not the problem
Economic growth has had a lot of bad press recently. Critics hold it responsible for environmental degradation, rising unhappiness and inequality. But on closer inspection, the objections typically leveled against growth do not stand up to empirical scrutiny. Economic growth achieves the very opposite of what its critics believe it does. Economic growth is no silver bullet to all the world’s problems. But it comes close.

Dr Oliver Hartwich, Exec Director, The New Zealand Initiative (Wellington)

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Critical Issues Forum 14

Portfolio construction implications panel 2 - NZ Economy
Our Faculty debated their high conviction ideas on the drivers of and outlook for the NZ economy.

Dr Oliver Hartwich, Exec Director, The New Zealand Initiative (Wellington)
Tim Farrelly, Principal, farrelly's Investment Strategy
Sean Heneghan, CIO Multi-Asset, AMP Capital Australia (Sydney)
Nathan Smith, Columnist, National Business Review (Auckland)

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Critical Issues Forum 15

Asset allocation will dominate portfolio returns in the years ahead
As we all brace for lift-off in the key US federal funds rate, going forward, robust, top-down macro perspective will be even more critical to the success of portfolios than ever. The US equity market faces a number of headwinds: a tightening in monetary policy; a stronger dollar; and weaker earnings. Reverse these three factors and you have the case for Europe. The argument in favour of China, India, Japan and India is that they have reformist governments. Then, consider which countries have the capacity to lower interest rates the most? The answer is China, India and Indonesia. But it’s not just about where you invest, it’s also about how you invest. The relentless pursuit of mediocrity and closet indexation just won’t cut it.

Jonathan Pain, Editor, The Pain Report (Sydney)

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Critical Issues Forum 16

Historic accumulation/decumulation models won’t work in future
Historically, we've spent 40 years accumulating assets and savings, followed by 10 years maintaining and protecting them, before passing them on to the next generation. In future, increased longevity will see a new pattern - 40 years accumulating, followed by 30 years decumulating – but the latter is at odds with human nature. We underestimate our lifespan and we want to buy now and pay later. It's possible, or more likely probable, for future generations, that our money will run out before our body does. This means that our historical models of accumulation and decumulation will not work for future generations

Diane Maxwell, Retirement Commissioner (Wellington)

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Critical Issues Forum 17

Risk and return – not as tight a link as we’ve been taught
What return premia - if any - are attached to different types of investment risk? And just how reliable those premia are in practice? Can the risks be diversified? This presentation will help you assess different types of risk and return and, in particular, see through marketing dressed up as sophisticated analysis.

Tim Farrelly, Principal, farrelly's Investment Strategy

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Insight

Cash may not be king but it could be a handsome prince
In this environment, what’s very important is capital preservation. The problem investors have is that there are very few places to hide. So, while cash may not be king, I think it could end up being a very handsome prince.

Simon Doyle, Head of Fixed Income and Multi Asset, Schroders

Insight >

 

Critical Issues Forum 18

Key Takeouts Workshop - The Markets
This highly interactive, Socratic workshop kicked off with each panelist outlining the high conviction idea they agreed with most, and which one they agreed with least. Delegates then worked in their tables to determine the same, before reporting back on a table-by-table basis. Collectively consider the portfolio construction implications.

Tim Farrelly, Principal, farrelly's Investment Strategy
Michael Furey, Managing Director, Delta Research & Advisory (Brisbane)
Janet Natta, Director, Smart Money Advice (Hamilton)
Debra Carlyon, Director, Stuart & Carlyon (Auckland)

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Due Diligence Forum 1

All is not lost in preserving yield in a low-yield environment
New Zealanders are living longer and enjoying healthier, more productive retirements than ever before. While this is good news, to enjoy the lifestyle they choose in retirement many people need regular income to supplement their New Zealand superannuation. But there is a problem. Yields on traditional saving vehicles such as term deposits and bonds remain close to multi-decade lows. Such yields are likely to stay low for some time because the ‘neutral’ cash rate and ‘equilibrium’ bond yield is lower than it used to be. Consequently, investors will need to hunt out alternative sources of yield to meet their investment objectives. All is not lost. Yield can be preserved in a low yield world but investors need to be aware of the risks and trade-offs associated with these alternatives.

Keith Poore, Head of Investment Strategy, AMP Capital NZ (Wellington)

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Small Caps are an essential risk diversifier
Investors in the Australian equity markets find themselves investing in a market that is very concentrated and therefore carries undue portfolio risk. Small cap exposure adds diversity in terms of a broader number of sectors to invest in - therefore providing essential diversity in terms of where profits and dividends are derived from. Diversity is an investor’s essential risk management tool. Small caps also provides access to emerging sectors and stocks. Importantly, investing in smaller cap sectors and stocks does not have to be a high risk strategy for investors. The diverse range of quality small cap companies with recurring earnings and growing dividend yields offer investors essential risk diversification and should be incorporated in to an investor’s portfolio.

Simon Conn, Senior Portfolio Manager, Investors Mutual (Sydney)

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Engaging NZ companies on governance will improve outcomes
There are several current New Zealand initiatives on foot focused on improving listed entity governance. The FMA has updated its "Corporate Governance-Principles and Guidelines" as well as "a Director’s guide to IPO's". The NZX recently updated its rules on continuous disclosure and the use of trading halts. However, at the coal face, it is the engagement between company Boards and institutional shareholders that can achieve meaningful improvements for all investors. NZ institutions lack the Australian tool kit of the "two strikes" rule, so perseverance and commitment are essential.

Rebecca Thomas, CEO, Mint Asset Management (Auckland)

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Due Diligence Forum 2

NZ fixed interest – picking the highest yield is not enough
Building NZ fixed interest portfolios is harder than it has ever been. The yield curve is low and flat, credit spreads are tight, and there has been a dearth of retail bond issuance for practitioners to choose from. It is not enough to wait and pick the highest yielding new retail issues as they come available. Portfolios need to be constructed for the specific needs of clients, which will typically be a combination of liquidity, income, quality, and diversification.

Christian Hawkesby, Head Fixed Inc, Harbour Asset Management (Auckland)

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Multi-manager global equity portfolios needn’t be low active share
The level of active share in global equity portfolios has received increasing attention over the last 10 years. This is another useful metric for assessing the multitude of different investment strategies available. When combining managers together to form a multi-manager global equity portfolio, investors should still aim to keep active share relatively high.

Alan Clarke, Investment Analyst, ANZ Investments (Auckland)

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Harness India's growth by investing before the crowd
To harness the full potential of the India growth story, investors need to consider equity exposure to companies which have strong links to the growth drivers of the economy. Rather than large, liquid companies with significant global revenue bases which dominate benchmark allocations, investors should seek exposure to India’s surging local demand, driven by the population demographic, rising wealth and initiatives of the recently appointed Government. This can be achieved by participation at an earlier stage of a company's growth, to capitalise on the growth story.

Mugunthan Siva, MD, India Avenue Investment Management (Sydney)

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Critical Issues Forum 19

Key Takeouts Workshop - Strategies & Investing
This second interactive, Socratic workshop kicked off with each of our DDF presenters outlining their high conviction portfolio construction strategy idea. Delegates then worked in tables with others who attended the same DDF sessions, to determine their key takeouts and portfolio construction implications.

Keith Poore, Head of Investment Strategy, AMP Capital NZ (Wellington)
Simon Conn, Senior Portfolio Manager, Investors Mutual (Sydney)
Rebecca Thomas, CEO, Mint Asset Management (Auckland)
Christian Hawkesby, Head Fixed Inc, Harbour Asset Management (Auckland)
Alan Clarke, Investment Analyst, ANZ Investments (Auckland)
Mugunthan Siva, MD, India Avenue Investment Management (Sydney)

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Due Diligence Forum 3

 

Portfolio construction of the future will focus on 3 risk buckets
We’ve always been told that asset allocation accounts for around 90% of performance volatility through time – but it doesn’t have to be that way and it’s definitely not the case for many investment strategies. In fact, the contribution to overall performance from exposures across asset class, risk factors, and pure market timing and security selection varies considerably across funds. Portfolio construction should therefore focus on three risk buckets – beta, smart beta, and alpha. If not, you run the risk of creating a poorly diversified (that is, over diversified) portfolio – and, worse, a portfolio that costs far more than it should.

Michael Furey, Managing Director, Delta Research & Advisory (Brisbane)

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Stress testing for DIMS
If you have a DIMS license, you are required to stress test portfolios. This session examined two practical approaches to stress testing, and the strengths and weaknesses of each, to enhance your understanding of how to build your own approach to portfolio stress testing.

Tim Farrelly, Principal, farrelly's Investment Strategy

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Critical Issues Forum 20

Mastering your Key Takeouts and professional positioning
This engaging, intensive and fun interactive 60-minute workshop showed delegates how to capture, package and articulate their Key Takeouts from Symposium NZ 2015, and synthesise them with their core professional value proposition, in a way that ensures clients see the benefit.

Michael Henderson, Corporate Anthorpologist, Cultures at Work (Auckland)
Michael has over 25 year's experience in observing advising and educating organisations (such as The NZ Rugby Union, Spark Digital, Ogilvy, Microsoft, and Coca-Cola) on how to enhance their workplace culture for greater levels of performance, staff fulfilment and customer delight.

This was a "you had to be there" session.

 

 

   

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