ANZ has bowed to the inevitable, finally scraping the last remnant of the OnePath name off its investment footprint while introducing a number of other changes to its default KiwiSaver scheme.

As of July 1, the OnePath KiwiSaver scheme will be known as the ANZ Default KiwiSaver, with the bank reserving the OnePath brand entirely for its insurance products in New Zealand. (However, ANZ retains the OnePath name in Australia for its wealth management unit.)

As well as the rebranding, ANZ has adjusted the default scheme's investment management style while jacking up fees for five of the six underlying funds.

According to the just-released ANZ Default KiwiSaver investment statement, the bank will now actively manage the asset allocation (that is, deciding what proportion to invest in, say, bonds or shares) of the underlying funds.


Previously, ANZ used a passive approach to asset allocation for the OnePath scheme, according to the September 2013 prospectus.

"This means we aim to align the actual asset class mix with the benchmark asset class mix," the OnePath prospectus says. "We don't expect this to change in the future, but we can't rule out the possibility."

However, the July 2014 ANZ Default KiwiSaver investment statement reveals the bank did have a change of heart.

"We vary the asset class mix by adjusting allocations to asset classes that we believe will perform strongly or poorly in the future (this is called active asset allocation)," the statement says. "We also vary the asset class mix to manage risk and manage cash flow."

Despite media reports to the contrary, the change in asset allocation policy at the default scheme formerly known as OnePath does not mark a switch from passive to active funds management style.

All the three ANZ-owned KiwiSaver schemes (down from four following the merger of the National Bank scheme last year) have always used active fund managers - as opposed to passive index-style managers - for most of the underlying investments. The exception is global shares, which the OnePath scheme invests into via the passive BlackRock Wholesale Indexed Equity Fund.

(As an aside, the ANZ Wholesale International Shares Fund has just added another active manager, the Swiss firm Vontobel, to its current roster of three global equity managers.)

But the switch to active asset allocation for the newly-named ANZ Default KiwiSaver has, nonetheless, come at a cost. For example, the conservative option (the fund the IRD will default members into who don't select otherwise) has seen fees rise from 0.55 per cent under the OnePath regime to 0.60 per cent in the ANZ Default.


While that's a small increase (as it should be given the asset allocation of the default conservative option is tightly constrained by law), it's still a cheeky move by ANZ in light of the recently-renegotiated default provider agreements that were intended to lower fees.

Except for the cash fund, which has fees unchanged at 0.45 per cent, the remaining four underlying funds in the ANZ Default KiwiSaver have increased considerably, up 0.4 per cent each compared to OnePath days with all these options now costing over 1 per cent.

As these new fees and funds are more or less aligned with the main non default ANZ KiwiSaver, it seems the bank has set the two schemes on a path to merger.