Biography
Stephen joined NZ Funds in 1997 and has worked in several roles since that time, principally in the investment area. Before that he worked for Ivory & Sime in Edinburgh and State Street Bank in London.

Approach
My early experiences in the investment area were assisting in the management of the in-house managed New Zealand equity portfolios. The late 90’s were a perfect time to begin a career in investments; a multi year bull market was at its frenetic peak but it quickly imploded and a sharp, deep bear market followed. To experience such contrasting market environments provided numerous invaluable lessons that have been fundamental in how I have managed clients’ savings over the past decade. A key lesson from this time, that I apply to this day, is that to clients, risk is just as important, if not indeed more important, than return.  Risk beyond a client’s tolerance must be avoided if they are to achieve their long term savings targets and it is unrealistic to expect them to weather the extremes of the inevitable bear markets.

A sub-set of this important lesson is that to achieve these reliable returns without undue risk, an investment process must developed and adhered to. By designing and testing an investment process, portfolio managers and analysts deepen their understanding of the asset class which ultimately leads to an enhanced investment process.  Furthermore when in time they begin to implement that process and run a portfolio they do so with rigour and discipline born from the conviction that in the medium to long term clients will receive the intended outcome. This avoids the ills that can occur when a portfolio manager responds too fundamentally to short term volatility and abandons their investment process, or even worse when a portfolio manager is without an investment process.

In recent years I have also spent time researching and selecting external managers. This activity has in large part been based upon selecting groups that can clearly articulate a sound investment process and then demonstrate that they have remained true to that process in the management of their portfolio. It may seem surprising but this is not as common place as an outsider to the industry would expect.

The Dividend Yield New Zealand equity portfolio that I have been involved in the management of since its inception has out performed the NZX50 index by 3.88% annualised per annum over the past 5 years.