I have nothing to go on when picking my Kiwisaver scheme provider. I mean, I've heard of ING, of course, and a few of the banks in New Zealand, but I don't know their reputations.
ING is a whole other animal outside of the US, folks. Someone has recommended Gareth Morgan to me and I know that I like Kiwibank, so I'll be looking particularly at GMI and the Mercer Kiwisaver (managed by Kiwibank). That is all the bias I have at this stage.
In her book, Holm breaks the process down into steps:
Step 1: get to know the names of providers. There are many...35 are listed in her book. Four of them charge an 'exit fee': eo, Gareth Morgan, Grosvenor, & Staples Rodway, but they are all less than $50.
Step 2: Which companies offer the investments you want (ie low, med, or high risk)? I'm young and risky so I know I want a fund with 71 to 100% growth assets. Southland Building Society does not have these funds, so it is crossed off of my list. A summary of international investment allocation is the next little table she provides. Earlier in the book, she lists the market shares by country: US has 400 times the market share compared to NZ. China and Japan are 100 times bigger; France and the UK are 50 times as large. A total of 51 countries have market shares larger than New Zealand's. In addition, New Zealand and Australia's market (which is 10 times bigger) go up and down almost in sync.
Therefore, I see no reason to invest in Oz- or NZ-only markets. [She then goes on to compare the performance 8 of the biggest markets to NZ over the past 30 years. I won't talk about it here--maybe in a future post--but if you are interested in that kind of thing, it is fascinating. It's worth it to take a look.] Milford Asset Management, Real Property, and Smartshares do not invest broadly in international shares (stocks). That's four of the 35 crossed off right there.
Next up, Step 3: Contribution minimums/maximums/time limits/one-off payments, options to be in more than one fund, and companies with socially-responsible funds
(*Disclaimer: I AM NOT A FINANCIAL PROFESSIONAL; USE INFORMATION ON THIS BLOG TO MAKE DECISIONS AT YOUR OWN RISK.) Information in this post taken from "The Complete KiwiSaver" by Mary Holm, published 2009.
5 comments:
I do not understand why you have crossed the Brook Professional KiwiSaver Scheme from your list as the Growth Fund option is 100% allocated to Growth (or higher risk) assets. The performance since inception is superior to most, returning 2.87% gross of fees & taxes in the midst of the global financial crisis! The short term performance of other funds may look better but that is usually because they destroyed so much value in the tumultuous last 18 months & have fallen & risen in line with market indices which should lead investors to ask, what am I paying the fund manager for if their performance merely rises & falls in line with market indices?
You are totally right! I've amended my post. I only looked at the '71-99% growth assets' row when I was writing this up. There is another row in Holms' book that describes 100% growth assets, and Brook is one of them.
Thanks for keeping me from crossing a potential kiwisaver scheme off of the list!
From my experience, having being signe dup automatically to a Kiwisaver.. then changing to Gareth morgan on a friends advice, the difference was massive. Great monthly reports and service. See exactly where my money is invested, no "units". No BS. Reccomend.
Flaco.
GM seems to be doing well but don't be fooled by the posturing on unitisation as its really just a marketing ploy.
Good day !.
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