Templeton overcomes temptation and celebrates 10-years of success with BNZ
Bank of New Zealand Investment Management (BNZIM) celebrated 10-years of success with investment manager Franklin Templeton this month.
Franklin Templeton manages the BNZ International Equity Trust investments. As at 30 September 2004, the BNZ International Equity Trust had a fund size of $133.85 million and according to Mercer Human Resource Consulting produced the best 10-year return before tax and fees of 9.9% per annum for the period ending 30 June 2004.
Anthony Thyne, Bank of New Zealand Chief Investment Officer says it is rare to share such a successful and long-term relationship with an investment manager.
“The last 10 years have been very fruitful and it made sense for BNZIM to stick with Franklin Templeton. Their experienced researchers continue to identify the best investment opportunities and they consistently outperform their competitors.”
“The secret to Franklin Templeton’s success is based on their value style investment philosophy,” says Jeff Everett, Franklin Templeton Chief Investment Officer for Retail.
Value style investment involves selecting stocks that appear to be fundamentally sound but are under-priced relative to the their future intrinsic value. By contrast growth style managers focus on stocks with superior long-term earnings growth and return on capital potential.
“Our success boils down to research,” says Mr Everett. “Information is examined on a company-by-company basis across a range of countries and industries. Based on that data, we are able to determine which companies are expected to generategain the strongest return.”
Templeton resisted theovercame temptation in 1999 to reassess their investment philosophy despite the continual rise of dot.comtechnology company (dot.com) share prices. Sticking to their value style strategy, Templeton argued the prices for dot.com shares were significantly overvalued and resisted pressure to invest in them.
It was a decision that Mr Thyne said paid off for Bank of New Zealand customers.
“Our decision to stick with Templeton despite the heady days of dot- com was one that paid off for our customers and certainly helped reduce the impact of the subsequent downturn.
“The persistence of Templeton’s investment approach over the long-term has been extraordinarily valuable to many patient investors.
To celebrate the 10-year anniversary Mr Everett will be in New Zealand to present a series of seminars to Bank of New Zealand’s retail and wholesale intermediary channels.
Established in 1940, Franklin Templeton is a pioneer of value style investing. They are a member of the Franklin Templeton Investment funds management group, which manages in excess of US $3650 billion for clients worldwide.
BNZ Investment Management Limited has been in the forefront of New Zealand investment management since the mid-1980s. It was named FundSource Fund Manager of the Year for 2001, 2002 and 2003 and Morningstar Fund Manager of the Year in 2002.
Both BNZ Tailored Investment Funds and BNZ Future Lifestyle Plan also have funds that gain exposure to Franklin Templeton through their international share assets.