ASB and BlackRock - a partnership for stronger investment outcomes

19 July 2021 / Published in Your Money

We're excited to announce the appointment of BlackRock, the world's largest investment management firm, as part of our broader partnership that will see our customers benefit from their global reach, responsiveness, and proven performance.

BlackRock have been helping ASB managing some of our customers' funds for over 5 years. We've expanded their role to enhance our investment offering and expertise to give our customers even better investment outcomes. In this space, BlackRock is at the forefront and the Multi-Asset team that will manage our investments has a very impressive track record.*

How does the ASB BlackRock partnership work?

As the investment partner for ASB, BlackRock will partner with ASB on the management of asset allocation and currency decisions across all investment products, (how and where we invest) including ASB Portfolio Series. This work has previously been managed in-house, with the support of external advisors. 

Until now, BlackRock has been an "underlying investment manager", where ASB provided an investment objective for specific asset classes, such as global shares or emerging markets and instructions on how we wanted to achieve it, for example by tracking an index. We made our own decisions on currency exposure and hedging. Now, ASB will continue to set the objectives for each fund, and BlackRock will help manage how the objective is delivered. But a key difference is BlackRock will make decisions on the two things we believe are most important for your returns: asset allocation and currency decisions. 

This new approach will allow us to be more responsive to the market. Previously we have reviewed our asset allocation and currency positions every quarter, but under the new partnership BlackRock will look to make adjustments in real time, in response to changes in the market. This responsiveness will have a big impact on our long-term investment performance.

In short, BlackRock Investment Management (Australia) Limited will manage asset allocation and currency decisions across our suite of managed funds. BlackRock will act as our chief investment officer and portfolio management function, encompassing active and index tracking manager research across asset classes, for all ASB investment offerings.

Individual asset classes, for example Australasian equities or international bonds, will    continue to be managed by several local and international investment firms, including State Street Global Advisors and First Sentier Investors, overseen by ASB in collaboration with BlackRock.

Who is BlackRock?

As of 31 March this year, BlackRock manages US$9.01 trillion for both large institutional investors and for individuals.  That 0.01 at the end may sound like we're being overly pedantic - but it does represent US$10 billion, after all.

As a leading provider of global investment management services and financial technology, BlackRock's purpose is to help more and more people experience financial wellbeing, helping millions of people build savings that serve them throughout their lives by making investing easier and more affordable. 

BlackRock's purpose is strongly aligned with ours, which is to accelerate financial progress for all New Zealanders. By leveraging BlackRock's scale and its investment expertise, we'll continue to look for ways to innovate our approach to help you and other investors achieve your long-term financial goals.

To put that scale into perspective, we're one of New Zealand's largest fund managers. We manage over NZ$20 billion of funds. Of that, $13.5 billion is within the ASB KiwiSaver Scheme. That's a huge number - but just 0.15% of BlackRock's size. 

Some people might think that makes us just a drop in their bucket. But when you're looking after people's futures, there's a lot to be said for choosing the biggest possible bucket. There's also a lot to be said for being part of a such a huge investment machine when competing on world markets on behalf of you and our other investors.

What does it mean for investors?

This partnership gives us the potential to build on our solid history of investment performance across our funds. We expect to deliver even better investment outcomes for you and all customers in the ASB KiwiSaver Scheme, our Investment Funds and Portfolio Series. But one of your numbers that won't be tracking up is fees. We have no plans to increase our fees as a result of the BlackRock partnership.

Asset allocation and currency decisions are the most significant drivers of fund performance. Harnessing BlackRock's world-class expertise in these areas through their end-to-end investment and technology platform, access to global investment expertise, and innovative approach to investment management will help to maximise the value we deliver to our customers.

BlackRock's scale and breadth of investment platform is designed to deliver investment solutions that enhance client outcomes and returns creating value and transparency for ASB's customers. BlackRock is committed to ethical investing, and use their shareholder voting rights to encourage better environmental, social and governance outcomes.

Another advantage is BlackRock's ability to quickly react to market volatility. Global markets can change rapidly and ASB and BlackRock will be in a better position to make decisions quickly and update our positions accordingly. 

The partnership also unlocks access to BlackRock's Investment Institute - the 'brains trust' of BlackRock, with some of the world's most brilliant financial minds. Their role is to support BlackRock's investment teams to make strong decisions, and to interpret the possible outcomes and impacts of current events and trends. 

Will there be new opportunities for ASB investors?

Our BlackRock partnership gives us scope to expand your investment options. 

Once the new partnership has settled in, we expect to draw on BlackRock's expertise to expand our investment products and information services. For example:

  • Looking at more growth asset-focused investment options.
  • We already have a Positive Impact Fund. With BlackRock's focus on strong governance and environment responsibility, we look forward to exploring options to expand our positive impact investments, so you can invest for your own goals, as well as in the changes you want to see in the world.
  • We will give you access to BlackRock's leading content and research material from across the globe. 

We're looking forward to our new partnership and delivering even better investment outcomes and options for you. If you'd like to know more, contact your ASB Wealth Advisor or Private Banker, or call our Wealth team on 0800 272 738.  

The agreement with BlackRock will be in place from 19th July and follows a global search  process that was kicked off by ASB in late 2019. 

To find out more about our partnership with BlackRock listen to our latest ASB Investment Podcast episode, available on Spotify or Apple Podcasts or click here.


*For example, its Tactical Growth Fund has performed in the top ten percent of its peers on a 10-year basis. Performance is for the ten years ended 31 January 2020 and assessed against MorningStar's database of multi-sector growth funds. Note this is an Australian based fund available to wholesale customers.

BlackRock Investment Management (Australia) Limited is a wholly-owned subsidiary of BlackRock, Inc. BlackRock, Inc is based in the US and is a leading global provider of investment management services with over US$9.01 trillion in assets under management as at 31 March 2021.

ASB Portfolio Series is a discretionary investment management service provided by ASB Bank Limited. For more information see the ASB Portfolio Series Service Disclosure Statement available from your Wealth Manager.

Interests in the ASB KiwiSaver Scheme and ASB Investment Funds (Schemes) are issued by ASB Group Investments Limited, a wholly owned subsidiary of ASB Bank Limited (ASB). ASB provides administration and distribution services for the Schemes. No person guarantees interests in the Schemes. Interests in the Schemes are not deposits or other liabilities of ASB. They are subject to investment risk, including possible loss of income and principal invested. For more information see the ASB KiwiSaver Scheme Product Disclosure Statement or the ASB Investment Funds Product Disclosure Statement available from this website and the register of offers of financial products at disclose-register.companiesoffice.govt.nz (search for ASB).


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