Understanding Investment Performance

For over 45 years, the global Fisher group of companies has helped clients navigate shifting market conditions across a variety of investment strategies.

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Established Performance History

The Investment Policy Committee of Fisher Investments New Zealand’s US-based parent company, Fisher Investments, has over 150 combined years of industry experience. Further, our founder, Executive Chairman and Co-Chief Investment Officer, Ken Fisher, has a more than 35-year public history of market calls. Whilst no money manager gets it right all the time, we believe the lessons learned from managing investments through many market cycles provide us with valuable insight and experience you may not get with other money managers.

Portfolio Performance and You

Fisher Investments New Zealand’s approach starts with you. We take the time to understand your unique needs, current financial situation and the goals you’d like to achieve with your money. With these in mind, we will recommend, where deemed suitable, an asset allocation strategy we feel best fits your particular situation, along with a recommendation for the discretionary portfolio management services of our US-based parent company, Fisher Investments.

If you would like to know which strategy we’d recommend for you or discuss our performance history, please contact Fisher Investments New Zealand on 0800 420 017. A representative will be happy to provide more information about our performance history and discuss investment strategies for your personal goals.

Past Performance Isn't Everything

When evaluating investments or a potential investment manager, you will likely be interested in past performance. However, we caution investors against considering only past performance, since it may not tell the whole story.

“Past performance is no guarantee of future results.”

If you have ever looked at marketing materials for an adviser or a financial product, you have likely seen a disclosure similar to the one above. Here’s what it means: An investment may have been up or down in the past, but that past movement doesn’t give any hint as to what that investment will do in the future.

A Higher Standard

Performance figures can be deceptive. Many methods exist for calculating and presenting investment returns. However, it can be difficult for advisers to show average results for a typical client since their investors each have unique financial objectives, investment time horizons and comfort levels for risk.

Of course, it’s easy for advisers to present their winners after the results are in. But, yesterday’s winners won’t necessarily be winners tomorrow.

Our Measure

We calculate performance based on the Global Investment Performance Standards (GIPS®), as it’s commonly known, is a framework of rigorous measurement standards with some important features:

  • Performance represents the majority of a firm’s client portfolios, not just a select few.

  • Quoted performance numbers are from actual client portfolios—no hypothetical returns.

  • Investors can compare firms that claim GIPS® compliance with each other on an “apples-to-apples” basis.

GIPS® is a registered trademark owned by CFA Institute.
CFA Institute does not endorse or promote this organisation, nor does it warrant the accuracy or quality of the content contained herein.

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Performance Benchmarks Help You Understand Your Returns

We believe the cornerstone of any valid performance measurement is a benchmark. Benchmarks act as a basis for portfolio creation and a reference point for measuring performance.

Typically, the benchmark should be a broad, well-constructed index. We use the MSCI World Index as the benchmark for most private clients’ equity portfolios. This index is designed to represent the performance of equities across 23 developed markets.

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Why the MSCI World Index?

We believe this index is generally an appropriate equity benchmark for a number of reasons:

  • It demonstrates our view that well-diversified portfolios should invest globally.

  • It accurately reflects the global developed equity market’s composition.

  • It is well-suited to help clients achieve their long-term financial goals.

  • Its inception goes back to 1969, informing our analysis and allowing us to scrutinise historic trends.

Long-Term Performance Means Staying Disciplined

Achieving performance results is only part of an effective investment manager’s duty. They should also be a trusted coach, who keeps you disciplined and helps you avoid mistakes you might make on your own. Investing is difficult. It can be emotional too, especially when market volatility strikes and your retirement savings are at risk.

Market performance will inevitably fall. When it does, fear may spur you to exit the market. You might even sell out at its lowest point and potentially miss the rebound. This can set you back substantially.

Similarly, when markets are rising, greed or the “fear of missing out” may unintentionally drive you to overconcentrate in outperforming sectors or pursue speculative investments (i.e., “chasing heat”). An investment manager should help you remember your financial goals and stick to your strategy. We believe that’s a key factor in achieving long-term performance results.

Questions?

If you have questions about our firm’s performance, or the current performance of your investments, contact us to request an evaluation.

Fisher Investments New Zealand can review your portfolio and discuss how our services may be able to help you reach your goals.

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