The rumness of Captain Morgan [updated]
The resignation today of Peter Huljich for what looks like spruiking the trading results of his Huljich Wealth Management KiwiSaver fund might lead to a little more focus on what some of these government-sponsored Kiwisaver funds have been doing.
And maybe one in particular: the Gareth Morgan funds, which trade on the basis of Morgan’s name—trading on "his “'Kiwiness' and self-proclaimed high-performance abilities” -- yet while Morgan himself leaves the grunt work of managing the fund to others he spends the major part of his time travelling the world talking up his bike-riding, and travelling round NZ boardrooms bad-mouthing other Kiwisaver providers—for both of which he now has something of a reputation.
This would be perfectly fine if the results of his managers matched his mouth. But they don’t. As David Chaplin noted in the Herald not so long ago,
“According to the Gareth Morgan Kiwisaver website, in the 12 months to January 31, 2010: its growth fund lost 6.61 per cent; the balanced fund dropped 2.51 per cent, and; the conservative fund returned 1.75 per cent.
While it's not an exact overlap in time, the recent Mercer KiwiSaver survey 2009 annual performance data serves as a proxy benchmark to measure Gareth Morgan Kiwisaver against. In the Mercer survey the average conservative KiwiSaver fund returned 8.1 per cent in 2009; the average balanced fund returned 12.1 per cent, and the average growth fund grew by 16.5 per cent.
Not so good.
And a recent Morningstar survey of Kiwisaver providers confirmed the less than stellar performance of Mr Morgan’s managers over the last year.
- With $28.5 million under their putative control in their “Conservative Fund,” Gareth’s managers’ ranked just 15th out of 16 in this class.
- Handling $102.7 million of other people’s money in their “Growth Fund,” they ranked only 19th out of 20.
- And with $130.9 million of people’s would-be savings invested with them in their “Balanced Fund,” they could only manage 22 out of 23.
How does that make you feel about him? That’s over $250 million of other people’s money, a lion’s share of the Kiwisaver treasure trove dropped into his lap through government policy, that Gareth is just not looking after.
Not good at all for a company that’s used his name to attract it all. In a market, that, we should remind ourselves, only exists because of government action (i.e., explicit tax benefits for savers and a legislative requirement for employers to plonk 2 per cent of employees' wages or salaries in their funds). With a company that’s helped get Morgan into positions where he now thinks he can tell you how much you should be taxed, and how.
Time to reconsider the sundry ponderous pontifications of this “people’s friend.”
Time for him –- if he’s to be taken seriously -- to stop talking his book and writing others, and instead to get his arse behind his desk instead of out on the world’s roads on the back of a Harley.
And time for editors to stop reprinting Gareth’s rants as if they’re the revealed wisdom of a secular saint. They’re not. They’re mostly just the rum old whingings of an underperforming seal.
As “Steve of Wellington” said in response to one of Morgan's recent whinges in the Herald:
"I've got my Kiwisaver with you Gareth and all I seem to do is lose money - thousands at the moment. How about less spin and more time trying to recover some of my money you have lost?"
Looks like a good call.
Disclosure: Peter does not have any money invested with Gareth Morgan. Nor would he.
UPDATE: Cartoonist ‘Blunt’ wonders if Gareth's asked for his own money back yet from “the top scientists” who so easily convinced him that anthropogenic warming was going to destroy the planet. And further: