You are correct for $'s invested two years ago but that has to be balanced out by the $'s invested since then in a market that was higher than now.
Printable View
Sorry careless post
Could be worth a look
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https://www.interest.co.nz/investing...tors-need-know
Co Duplicate
My strategy has been to do the opposite of what the paid spruikers on TV say, and so far it has worked well.
Would hate to think what state KiwiSaver and bank investment fund balances (and the Cullen Fund) will be in by the time this emerging financial crisis is done.
I would say with confidence, lower than the S&P500 index. Jack Bogle (RIP) even knows it. But what do all these financial advisors have to say? Well they're always going to say, "We are investing for the LONG TERM...." When that long term gets the investor 50% less than what buying the index ETF over 50 years compounded would have at the end.
What do you think about Kiwisaver Funds entering Bitcoin?
https://www.stuff.co.nz/business/124...he-bitcoin-era
Investment or speculation: KiwiSaver fund enters the bitcoin era
I've just been having a look at some of the KiwiSaver "growth" returns for the last 12 months. Although too short a period to measure how they operate over the long term, Juno KiwiSaver seems to in the lead for crappiest returns over 12 months.
Juno (active): down 26.65, pretty much in line with Pie Funds' two Australasian growth funds.
Milford (active): neutral at 0.62% - a pretty good return compared with the likes of Juno
Simplicity (passive until their vocal leader gets in a snot about a company or two, e.g. GNE and DGL): down 3.88% but is before tax.
My view on passive vs active is that the good active should beat the passive, but they will charge for it. When everything goes wrong they have the opportunity to sell high and buy low, something which Milford seems to have done well. Perhaps they could share their ideas with Juno / Pie Funds.
I now have the decision to make whether Juno, relying on Pie Funds, will bounce back or is it time to stop throwing good money after bad rubbish and move to one of the others.
Still, I am with 100% cash fund. I am looking forward to transfer my cash fund to balance fund, dividend fund or growth fund once I see value in the market. At this juncture, I would like to preserve my capital.
I'm not sure that some investors here don't confuse risk and volatility ?
Take for example this fund manager
https://milfordasset.com/funds-perfo...ew-performance
There are all sorts of risks with investing.
The main risk I perceive is underperformance over a time period.
The only thing that matters to the investor is the net return after their take. So when you fact their commissions and management fees in active fund, the DO NOT beat the market index. The financial industry is baked into the idea of selling the concept that 'active fund managers' do better but they often omit their end fees and taxes (ie buying in and out triggers taxes to pay within the fund vs long term passive buy the index and hold does not).
Warren Buffet made this wager between actives vs passives over 10 years ago that in a 10 year time frame, cumulatively, active fund managers do NOT beat the S&P index returns net of taxes and admins fees. I believe the same priciples apply here in NZ with the NZX when investors have a habit of expecting dividend payments from NZ shares when it erodes the stock price of having no capital gains (ie TWG.NZ has a diviidend paying policy... and it's stock price has stayed the same for over 20 years; even less if you factor inflation). Anyways, Buffet's rank on active / hedge funds is on YouTube if serious investors care to watch it.
Is this article a little out of date? Mar 21st, 2018. Already Parliament has been working on a deposit insurance plan for NZ:
https://www.beehive.govt.nz/release/...iament%20today
I am doing well with my Kiwisaver. Finally, it is up by more than 2% where as other types of funds have dropped by more than 5% over the last one year. I found there is a no value fund to choose for my Kiwisaver. I don't think growth stocks will do well in the coming decade.
I have a KiwiSaver account. It's a balanced fund. It's not very big.
I use it to benchmark my non-KiwiSaver portfolio performance. It's really handy.
You have to wonder, Kiwisaver default schemes are now directed to "balanced" funds rather than "conservative" funds just in time for a recession.
It might have the benefit of people taking more notice of their Kiwisaver funds especially if we have a recession and rising interest rates mean negative returns.
Probably not what the world improvers were hoping for but as is often the case intelligent well meaning meddling world improvers making things worse for the people they are trying to help.
They need to understand their theory only works if interest rates keep dropping and money continues to be debased. Which is probably not a bad bet, probably only a little early on the timing.
Value creating
"Morningstar data director Greg Bunkall said Milford was a high performer because it had a very loose mandate around asset allocation. “It allows them to generate a differentiated return profile, as they can substantially dial up or down the portfolio’s risk buckets as they see the markets evolving.”"
https://www.stuff.co.nz/business/mon...t-30-in-a-year
I have just looked at my Kiwisaver holdings in some detail. I am invested in Simplicity Growth Fund. I find it alarming that 2 of Simplicity's own schemes, appear in the top 10 holdings overall and number 1 & 3 in their NZ portfolio.
Here are the 10 biggest holdings from highest to lowest: Apple, Microsoft, Simplicity Living Ltd, Fisher & Paykel, Simplicity Home Mortgages, NVIDIA , Spark, Infratil, Meridian.
I have been happy with this fund to date but this recent change concerns me. I don't like how Sam Stubbs can just decide where, when and how he wants to "do the right thing" and invest a large proportion of our Kiwisaver money into his schemes. As an example, his 2 schemes combined hold more of my Kiwisaver than any of the other holdings in the fund, including Apple, Microsoft & NVIDIA.
What do others think about this ?
Same boat as you, except it’s my kids accounts, which have a pretty good whack in them, through good fortune rather than intentional. Wanted to switch them to Kernel but they still don’t offer kids accounts. MoneyKingNZ tries to review the different options while staying neutral.
I transferred out of simplicity for similar reasons to those mentioned (moving a bit close to active). Still have a small amount in their global fund, I think this is possibly the cheapest fees on offer. Cheapest I could find anyway. KiwiSaver now with kernel who seem a solid operator.
I had something similar with ASB kiwi saver a while ago. The degree of concentration was unsettling and then when I asked for specific holdings so I could asses exposure or leverage they wouldn't give that to me except in the most generally terms. Changed over to Craig's self selected. Get gouged on brokerage and fees but at least I can rest easy knowing exactly what I am invested in.
I don't mind you asking. I actually decided to go to Milford Growth Fund. It is an actively managed fund and is quite concentrated in a few stocks that are not your normal run of the mill in passively managed funds. I liked what I saw and will be watching it closely and possibly moving to a passively managed index tracking fund quickly if I don't like it. So a bit of a punt, but my punt.
I lost faith in Simplicity when they started several schemes they think is "socially responsible" and then invest my retirement savings in these schemes without me having a say in it. Simplicity scares the **** out of me now.
Milford’s active growth? I have my KiwiSaver split between Milf’s active growth, balanced and aggressive. I have changed the mix proportions a couple of times. They supply good information and have good online access. The returns seem to be above the industry averages. Certainly more detailed information and more flexibility than the big bank scheme I was initially with.
I’m the same, just pulled some back from aggressive to balanced… 50% growth, 25% balanced, 25% aggressive
Are you referring to this fund?
https://simplicity.kiwi/investment-f...nd-income-fund
It is certainly a novel approach to an investment fund. But it looks like it is 'contained'. IOW if you like the Simplicity cost structure, but don't like this particular 'sector' that Simplicity has created, then you don't have to invest in it.
Looking at the target asset allocation for the 'homes and income' fund, there is a 10% allocation to 'community social housing'. The bit you don't like? But on the upside, I guess most of the rent for those properties would be guaranteed by WINZ?
25% allocation to 'residential mortgages'? I don't have a problem with Simplicity providing competition for the banks in this area.
25% allocation to 'unlisted property'? The listed property sector in NZ I find quite limited. There are only eight NZX listed companies that provide suitable liquidity for a fund manager to invest in. And despite the PIE tax benefits they offer, my take is that none of them are bargains. So I can understand the sidestep by Simplicity to unlisted property.
What concerns me the most is the 40% allocation to cash or cash equivalents. Cash is handy for providing access to liquidity for opportunity. But as a long term investment class, cash has traditionally provided the lowest returns. To be fair, Simplicity itself is only suggesting an up to three year time horizon for this investment. High interest rates are likely providing a sweet spot for cash investments right now, that one would not expect to see continue into the future. It seems odd to have a long term target of having 40% of your fund in cash or cash equivalents! But then I thought again about how illiquid those other constituents of this fund are. So it could be the cash is needed to provide for the ebb and flow of investor money, and in particular the position of the fund if a whole lot of investors suddenly want out? Although in practice Kiwisaver is an ever rising tide and Sam Stubbs is on record as saying in the seven years since they have existed, they have never had to sell any investment to meet redemption demand.
It is this high cash allocation that would put me off investing in this fund. But personally I don't have a problem with the rest of the fund allocation. YMMV and obviously does?
SNOOPY
I think the concern Snoopy was that the Simplicity Growth and High Growth funds feature holdings of Simplicity Living in the top 5.
Growth it's number 2 and High Growth it's number 4.
Shane Brealey and Sam Stubbs are people who get things done. They make it very clear they want to do good things and that doesn't have to involve not making money for investors.
A Sam Stubbs podcast interview, where he discusses Simplicity's investment in community housing is here::
https://simplicity.kiwi/learn/update...garner-podcast
Notes I have taken from this podcast on his community housing venture are below.
Simplicity manages the savings of 147,000 New Zealanders. Being a charity, the management structure of Simplicity will never make any money, as fees are set 50-70% below the rest of the industry. So they will never be bought out or sold to another market player.
Community housing being built now by Simplicity includes a 51 unit complex of one and two bedroom apartments in Mt Albert (where there is the biggest demand). 10 year leases are on offer, and Simplicity intends to be the long term owner. 42% of people in the OECD live in apartments. In NZ it is about 3%. This is because we have built out, out and out. By land area, Auckland is now the fourth largest city in the world. Building up next to transport hubs, supermarkets and schools is where residential development has to head. Simplicity buys the land, builds the apartments, rents them and maintains them in a vertically integrated 'in house operation'. The building code says you have to build something to last 50 years. Simplicity builds are designed to last 100 years, built out of concrete, brick and aluminium (windows): Never needs washing, never needs painting. But despite the quality build materials, costs are saved by building all of the apartments to be exactly the same, including colour schemes. Interior decor is all white, although tenants are allowed to paint the walls a different colour if they wish. Architects will say that is 'cookie cutter' design. But everything else people buy, be it cars or baked beans, is cookie cutter. Cookie cutter does not necessarily mean poor quality.
In some parts of Germany, renters are into their third generation renting the same house. They regard these long term rental units as their own home and treat them as such. When you have happy tenants with long term occupation security, they are not 'tearing the place up' and they are 'looking after each other'.
Construction expertise has been provided by townhouse developer 'NZ Living' (who have built state houses for Housing NZ before) which was formerly owned by philanthropists Shane and Anna Brearly, who transferred that company to become 'Simplicity Living'. The target for Simplicity Living is to be building 1,000 homes per year within five years Simplicity are even prepared to build on hospital board land and iwi land that they do not own, with suitable lease arrangements in place. Tenants could include the elderly who want to live close to hospitals and hospital staff (including the cleaners) who can avoid 'the big commute'.
What is Sam Stubb's view on the wider housing market, that has drawn him towards taking his own path, via Simplicity, into investment in this space? State house building and private house building were a match for each other up until about 1980. But since then the build rate of state housing has halved, leading to a 45 year supply/demand imbalance that has pushed up house prices well ahead of inflation. Leaving the private sector to take most of the initiative in house building is a convenient way to keep house prices high and house owners feeling wealthy and free to spend their own money. But it also disenfranchises a whole generation that cannot get onto the property ladder. 25% of NZers spend more than 40% of their income on rent or mortgage, making NZ the least affordable country in the OECD in which to live. The last bill you won't pay is the rent or the mortgage. So if you are invested in housing it is very secure cashflow.
SNOOPY
Shane has the right idea and was getting a lot done for Kainga Ora and Kiwibuild but he clearly got the ****s with those programmes being a handbrake.
Pairing up with Simplicity has allowed him to crack on, I've listened to and read alot about what they do and how they do it.
Both are very active and vocal on linked in if you don't already follow:
https://www.linkedin.com/in/shane-brealey-635373297/
https://www.linkedin.com/in/sam-stubbs-2783181a/
Shane and Anna are already very very rich and successful, originally I thought they were cashing out when they announced NZ living was becoming Simplicity Living. I had it all wrong and was letting my pessimism of the average housing developer influence my view. They are bringing the overseas model of BTR to NZ, if they fail it's because they won't be allowed to succeed rather than doing anything wrong.
I must say when I heard about Simplicity getting into 'Build to Rent', I thought "Do these guys really know what they are doing?" It is one thing to have an image about 'doing the right thing'. But it is quite another to bring such a project to successful fruition. It sounds like Sam Stubbs has teamed up with a pair who indeed 'do know what they are doing.' Reassurance I think for Simplicity customers 'who did not know'.
SNOOPY
That's exactly right. Before I pulled out, my growth fund had these as the 10 biggest holdings from highest to lowest: Apple, Microsoft, Simplicity Living Ltd, Fisher & Paykel, Simplicity Home Mortgages, NVIDIA , Spark, Infratil, Meridian.
So it only held more Apple & Microsoft than Simplicity Living Ltd, which combined with Simplicity Home Mortgages was a bigger holding than F&P, Spark, Infratil and Meridian combined.
That is not a responsibly managed Kiwisaver growth fund in my view. I agree with posts on here that this is good work and some very well qualified people involved, but it has no place in my growth Kiwisaver fund.