Fisher Funds is about to embark on a mini-rationalisation of its products, tipping two of its smaller offerings into larger investment pools pending unit-holder approval.
In meetings due to be held today (Thursday, October 18), unit-holders in the Fisher Fledgling and Trans-Tasman Funds will vote on proposals to transfer to the group's NZ Growth and/or Australian Growth products.
Fisher Funds chief, Carmel Fisher, says the fund closures if they are approved will be a logical update of its product suite.
Both funds are relatively small about $3.2 million and $4.3 million for the Fledgling and Trans-Tasman funds respectively as at March 31 this year with investment strategies that more or less mirror Fisher's flagship products.
Fisher says the Fledgling Fund, set up in 1999 to accommodate children, has really been superseded by KiwiSaver, of which about 25 per cent in the Fisher scheme are classed as children.
In a letter to Fledgling unit-holders, Fisher says the firm will maintain the educational components the youth-focused fund delivered across its other products.
"Our team has been working on ways we can improve the delivery of financial education and a better investment outcome while retaining all the important features that supporters of the Fledgling Fund have enjoyed," the letter says.
The Trans-Tasman fund, which Fisher bought from First NZ Capital in 2010 along with its KiwiSaver fund, will have its contents redistributed across the NZ Growth and Australian Growth funds as appropriate.
"When we bought the Trans-Tasman fund we kept it because we thought investors would like to invest [in Australian and NZ shares] in a single fund," she says. "However, the demand hasn't been huge. Most investors want to choose their own weightings [between Australia and NZ]."
The Trans-Tasman fund has shrunk from about $11.4 million in June 2010 to $4.3 million in the latest audited accounts.
In July Fisher also amended the name and mandate of its infrastructure fund, which up until then had been managed by Morrison & Co. The Fisher Funds Property and Infrastructure Fund, previously known as the Fisher Morrison Infrastructure Fund, is now managed in-house by Murray Brown and, as the new name suggests, can branch out to property investments rather than pure infrastructure.
"Property was probably the biggest gap [in Fisher investments] compared with our peers," Fisher says.
Fisher Funds annual accounts also reveal the company borrowed over $14 million and raised extra capital of almost $2.7 million (from issuing 337 new shares), primarily to finance its $20 million purchase of the Huljich KiwiSaver scheme last year.
Fisher says the group's revenue, over $13.5 million in the 12 months to March 31 this year, easily covers the interest costs.
"If ever there was a time to take on debt, it's probably now," she says.