AMP's move to passive creates opportunities for active managers

Not as shocking as a global pandemic, in this year of shocks, was the decision by the AMP to become a passive investor. To the investment community in New Zealand though, it does rate as a pretty big upset.

Founded in 1849 as the Australian Mutual Provident Society, AMP is one of Australasia’s oldest and best-known companies. It has a very long tradition of being one of Australasia’s highest profile independent active investment managers.

Indeed, when the New Zealand Superfund handed out its first set of mandates back in 2003, it was no surprise that AMP was one of the active New Zealand equity managers they selected. AMP went on to hold that mandate for well over a decade.

While AMP going passive was a surprise to most, it is not a move that goes against the trend. Our afore mentioned New Zealand Super Fund has long held the belief that the most efficient way to access global equities was via passive mandates. The exception to this was their use of active managers for New Zealand equities, where they felt there was sufficient evidence of active managers being able to consistently outperform the S&P/NZX 50 index.