Developments in the Synergy Consilium Classic, SRI & PIE portfolios

Since last quarter, Consilium has been working on a number of Synergy portfolios, as we look to deliver better overall investment outcomes to Synergy investors.

In this article, we explore how these recent changes to portfolios deliver lower fund manager fees for investors, better expected risk/return profiles and growing emphasis on the environmental and social characteristics of our SRI portfolios.

Reduction in fund management fees

Consilium has been able to achieve a reduction in some management fees for all Consilium Synergy portfolios.

  1. In April 2021 the Harbour NZ Equity Advanced Beta Fund had a mandate change and was renamed the Harbour NZ Shares Index Fund. This change resulted in a management fee reduction for investors, from 0.25% p.a. to 0.10% p.a. This change only affects Consilium Classic and PIE portfolios.

  2. Synergy SRI portfolios have had an allocation change from the NZ Core Equity Trust to the Harbour Sustainable NZ Shares Fund. The new fund also comes a fund management fee reduction for investors, from 0.35% to 0.10 p.a.


Improvements in SRI characteristics within SRI portfolios

Australasian equities

The new Harbour Sustainable NZ Shares Fund has a wider focus on SRI characteristics. In addition to the gambling exclusion that the incumbent fund has, this new fund excludes investment in companies involved in the manufacturing or sales of alcohol, tobacco, recreational cannabis, adult entertainment, weapons (firearms, munitions, or nuclear armaments), and companies with a record of animal welfare violations.

In light of New Zealanders’ generally strong support for the consideration of environmental impacts (for example carbon emissions) and of human rights violations (including child labour), any companies with a poor record in these areas will also be excluded.


International equities

A change in allocation from the iShares Emerging Markets IMI Equity Index Fund to the iShares MSCI EM SRI UCITS ETF, includes exclusions on all weapons (including civilian firearms), alcohol, gambling, tobacco, nuclear power, adult entertainment, genetically modified organisms, thermal coal, oil sands and unconventional oil and gas extraction, and exclusions on companies that have been flagged for controversies including human rights violations.


Slightly higher expected returns and risk

Following the implementation of all changes, the expected returns of Synergy Consilium portfolios will generally be a little higher, with broadly similar levels of portfolio volatility (i.e. the potential ups and downs in returns).   

Our team will continue to monitor the investment landscape to deliver good investment outcomes for Synergy clients.