Not all KiwiSavers are created equal. 

“I’m fine I’m in a growth fund” is something we hear all the time. Unfortunately for those people just being in a growth fund doesn’t mean you will do well. 

The worst performing Growth fund as at the March 2019 quarter was 4.8% while the highest performing fund was 11.7% over the same period*

Source- https://www.morningstar.com.au/s/documents/KiwiSaver-Survey-Q1-2019.pdf

One of the biggest problems for everyday Kiwis is that you can call a KiwiSaver fund whatever you want within reason. Just because you name a fund a growth fund doesn’t mean it is a growth fund. It’s a similar concept to how a food company often claim a product is “healthy” but unless you check the label you never really know. 

One of the most recent examples of this is our brand new Juno KiwiSaver fund. Juno has a target to have 80% of the fund in growth shares. However, it is currently sitting with 55% of its funds in term deposits or savings accounts. That sounds more like a conservative or moderate fund to us. 

Source – https://www.junokiwisaver.co.nz/Portals/0/Documents/1903JU1935_G_Quarterly%20Fund%20Update_A4%20Document.pdf?ver=2019-04-17-234806-310

KiwiSaver is an investment, not a savings account. Your funds can vary in many different ways that you may never have thought about. It is always best to have a chat with someone who can explain these differences to you and find one that suits you. 

Currently, 42% of Kiwis have their funds sitting with the 2 biggest Kiwisaver providers, ANZ and ASB. With the biggest reason for people choosing to stay in those funds being that it is easy to see their current balance on their banking app. 

Now I don’t know about you but making investment decisions based on how easily you can see your fund balance on your banking app doesn’t sound like a smart investment strategy to us. To counter this, many providers have created apps that you can access once you join up. So there is no excuse not to make your investment decision based on actual fund performance. 

As always if you would like any more information on how to find out what your fund is made up of or to chat about any of the points raised in this blog please feel free to reach out to us.

Tanta Financial Advisers – Mortgage, Insurance & Kiwisaver Advice on Auckland’s Northshore

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