Welcome to Mercer’s 7th survey for New Zealand Endowments and Foundations

The results of this survey – the release of which has been impacted by the Covid-19 outbreak - provide insights and key trends on important issues impacting investment portfolios within the Endowments and Foundations (E&F) sector.


This survey closes what has been an extraordinary decade in which ‘unprecedented’ can be applied to events, climate, geopolitics and indeed, the global economy. We have seen central banks move monetary policy beyond conventional cash rate settings and engage in ‘non-conventional’ policy approaches such as quantitative easing, negative interest rates and ongoing ‘forward guidance’ in order to suppress rates over all time periods and ensure sufficient liquidity remained within the financial system.

 

 

David Scobie,
Head of Consulting,
Mercer New Zealand

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The current market and regulatory pressures suggest that investment portfolios will need to ‘work harder’ going forward. At the same time, the consideration of ESG factors into investment decisions of E&Fs continues to gain traction. A review of investment objectives, strategic asset allocation and spending policies can ensure alignment and achievability in the current environment.
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Taking a look back 

 

The extraordinary global economic events have coincided with extraordinary returns from capital markets. The non-conventional approaches to monetary policy have been a key contributor to the strong returns from both equity and bond markets. This has led to many E&Fs experiencing high single-digit returns (per annum) over the past decade. But what does the future look like?

 

 

The key numbers

We surveyed over 25 New Zealand E&Fs, and here’s some of the things they told us:
 

52%

Nominate market volatility as their biggest risk 

73%

Indicated that their current spending rate is over 4% of investment returns 

10%

Have lowered their return objective in the past 12 months 

52%

Rate ESG as important when reviewing or appointing external managers 


What’s keeping E&Fs up at night?

Market volatility and insufficient returns at centre of concerns

Funding pressure continues to build in a low growth environment

Policies and objectives remain steady

ESG remains important for E&Fs

 

Brian Kearney,
Head of Delegated Solutions,
Mercer New Zealand

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Market volatility and a ‘lower for longer’ environment are front of mind for New Zealand not-for-profits. Though with the right questions, and the support of highly rated managers, you can help insulate against market volatility, rising geopolitical uncertainty and downside risks.
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What are the key findings from the endowments and foundations survey? 

 

     

Learn more about the solutions Mercer provides...

 

Download the Endowments and Foundations executive summary

What are the key findngs from the endowments and foundations survey in 2020? Download and read the insights to the report. 

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