Another newbie seeking advice

[Demilich]

Hi all.

Just a bit of background on my position. About to turn 35, married, no children (none planned - had the snip, so any unplanned ones will be rather awkward :p). Over the last couple of years we have sold everything we own and changed our lifestyle, where we are basically full time backpackers travelling the world. Current plan is to do this until we no longer enjoy it, so may be 5 years, 10 years, 20 years... who knows? Currently we've been in Asia since February.

I work remotely and after living/travel expenses, we are currently clearing about $1500-2000 a month to save/invest. Currently have around $6000 in Superlife (more on this below), $3000 in a Kiwisaver scheme and about $320,000 in savings. Obviously there is little return on the savings, and I am planning on moving it into investments over time. My appetite for risk is moderate - I am happy to invest in shares, but I currently don't have the time to do the serious research required for hunting down individual shares to invest in and I am happy with what ETFs offer. I may possibly look at a rental property at some point next year, but I am not currently that interested in the current ratio of "rental/capital return vs stress/hassle of being an overseas landlord".

6 months ago I decided to get "skin in the game" with the share market and set up a Superlife scheme putting in $1000 a month. I went for Superlife due to the low(ish) fees and the ability to drip feed monthly. I tried to spread my investment a bit, and went with the following breakdown:

NZ Dividend ETF - $150 pm
NZ 50 Portfolio ETF - $250 pm
NZ Property ETF - $150 pm
Aust Property ETF - $150 pm
Aust Midcap ETF - $100 pm
US S&P 500 ETF - $200 pm

As is to be expected, some of these have done better than others, but I am in it for the long-term and happy with that spread so far.

I want to up my contribution to $2000 (or just over) per month, and was hoping some more experienced folk could run their eyes over it and make any recommendations or suggestions at other options to look at. I will provide a brief explanation of my thinking for each of the changes:

Increase NZ Div ETF by $250 pm - I like the thought of high dividend shares, both for the returns coming in and them being a bit less volatile.
Add Aust Dividend ETF $200 pm - as above, but diversifying into the Oz market as well


Increase Aust mid cap $100 pm - I want to increase investment into the Oz market - happy to change this one, as the dividend one above is obviously increasing exposure to Oz already. Put my choice of Aust mid-cap over the other Oz options down to a newbie doubling down on his currently best performing investment, as opposed to anything particularly scientific ;)


Add Emerging Markets ETF $150 pm
Add Europe ETF $150 pm
Add Asia Pacific ETF $150 pm

The 3 above are simply for diversifying into other markets. Emerging markets has a question mark due to it having higher fees than the other options. Asia Pacific is actually a fairly narrow scoped ETF, with almost 60% of it in Japan (and 17.5 which is yet more investment in Oz).


Increase NZ Prop by $150 pm
Increase Oz Prop by $150 pm

These two I would like some advice on. I want to diversify into property at some point, preferably without sinking all my money into a single rental property. Are these property ETFs really achieving that, or are they considered more like "just another share" (albeit in a different sector)?

Are there any other ETFs that people would recommend adding/replacing any of the above?

These are the ones available via Superlife: http://superlife.co.nz/investments/investment-options

I am also happy for advice on other investment areas to look at (in a year or so I may have the time/inclination to "do my own research" on individual shares, but they aren't really of interest right now).

Thanks in advance!

[huxley]

Hi there

Id be reluctant to offer any "advice" as such regarding your asset allocation, but I notice it seems to be heavily weighted towards NZ & Austrailan investments. Any reason for this other than potentially higher dividends?

Just for comparison my super life is currently: 80% overseas shares (unhedged) 10% s&p500 2.5% NZ50 2.5% Aust mid and 5% fixed interest/bonds.

For me my focus is longer term growth outside of NZ (since I live and work in NZ I'm already pretty dependent on the local economy etc etc)

Good luck with the travels btw!

[Demilich]

Hi there

Id be reluctant to offer any "advise" as such regarding your asset allocation, but I notice it seems to be heavily weighted towards NZ & Austrailan investments. Any reason for this other than potentially higher dividends?

Just for comparison my super life is currently: 80% overseas shares (unhedged) 10% s&p500 2.5% NZ50 2.5% Aust mid and 5% fixed interest/bonds.

For me my focus is longer term growth outside of NZ (since I live and work in NZ I'm already pretty dependent on the local economy etc etc)

Good luck with the travels btw!

Thanks for the reply - that was exactly the kind of thing I was looking for, rather than specific allocation advice - just pointing out things I might be missing/not looking at or questioning the reasons behind those I am.

Higher dividends was certainly part of my thinking for Oz/NZ. Although I earn in NZ dollars, I don't really live there at present and don't have money invested locally in a house or anything, so I am happy with having a reasonable percent going into NZ markets.

I had been tossing up between the increases to the two property funds and increasing the amount allocated to the US S&P ETF, but had been erring on the side of increasing the property ones now and adding to the US one some time next year. I hadn't had a close look at the Overseas Unhedged fund, mainly because I thought those Sector Funds had higher fees than the ETFs when I last looked at them, but looking again it appears they don't, so I will have another good look through them. On a side note, the Superlife web-site is terrible when it comes to finding information on the ETF/Sector funds - there are numerous pages that list them, but you have to keep switching between sections in the hope of finding one that has a link to the actual details on the fund and then do the same to try to track down the fees. It looks like the website was created by someone who was being paid per page and wanted to milk it for all they could.

[justakiwi]

On a side note, the Superlife web-site is terrible when it comes to finding information on the ETF/Sector funds - there are numerous pages that list them, but you have to keep switching between sections in the hope of finding one that has a link to the actual details on the fund and then do the same to try to track down the fees. It looks like the website was created by someone who was being paid per page and wanted to milk it for all they could.

I completely agree. I am a newbie here so trying to soak up as much info as possible. I read your post earlier today so went to check out Superlife to see how their ETF funds compare to Smartshares. From what I can tell it seems the Superlife ETF funds all invest directly into the Smartshares funds. I was trying to find out what their fees are etc to do a comparison but their site totally sucks. I couldn't find the information I wanted anywhere so just gave up. Businesses don't seem to realise that people often judge them by their websites. I'm always hesitant to do business with a company that can't put time and effort into creating a professional, user friendly, efficient website.

[Harvey Specter]

Justakiwi - for background, the NZX, who one Smartshares, purchased Superlife a couple of years ago so I think moved most of their index funds to the SmartShare ones.

Unfortunately they haven't got around to updating the website since it was created back in the paleolithic era.

With new competition coming to Kiwisaver in the form of Simplicity.kiwi it will be interesting to see if they respond.

[Demilich]

Unfortunately it's probably worth the hassle, as Superlife appears to have much lower management fees for the fund management - for example, NZ Div is .20 on Superlife and .54 through SmartShares themselves. I had a couple of the links open, so here they are:

http://superlife.co.nz/investments/investment-portfolios that's a link where you can look at the actual details of the investment options
http://superlife.co.nz/superannuation/fees - link to the fees

Be warned, signing up to Superlife can also be a bit of a pain in the ass. But their products themselves seem pretty good (as far as the options available in the NZ ETF market).

[justakiwi]

Unfortunately it's probably worth the hassle, as Superlife appears to have much lower management fees for the fund management - for example, NZ Div is .20 on Superlife and .54 through SmartShares themselves. I had a couple of the links open, so here they are:

http://superlife.co.nz/investments/investment-portfolios that's a link where you can look at the actual details of the investment options
http://superlife.co.nz/superannuation/fees - link to the fees

Be warned, signing up to Superlife can also be a bit of a pain in the ass. But their products themselves seem pretty good (as far as the options available in the NZ ETF market).

Mmmm ... do you know if there is a Smartshare fee on top of that? I can't find it now but when I was reading up on Smartshares the other day, some of their ETFs are invested directly into Vanguard ETFs which means you need to add a Vanguard fee into the mix. I wonder if you invested into those funds via Superlife whether you would then have to take into account both a Smartshare and a Vanguard management fee.

Too many questions and too many options. Unlike you, I'm a very very small investor and brand new to all this so I find myself overthinking everything. I think I just need to pick one then stop looking at all the others ;)

[huxley]

The superlife website is certainly due a refresh! Remember it was purchased by the NZX in 2015 and has slowly been changed.. but is a long way behind the smart shares site..

The overseas share fund ( both hedged and unhedged) passively tracks the MSCI world index. Before Superlife merged with NZX it was managed by a company called State Street investments but now I see it's made up from several of the smart shares ETFs ( this will be because it's more profitable for NZX to use funds it owns).

[blackcap]

Mmmm ... do you know if there is a Smartshare fee on top of that? I can't find it now but when I was reading up on Smartshares the other day, some of their ETFs are invested directly into Vanguard ETFs which means you need to add a Vanguard fee into the mix. I wonder if you invested into those funds via Superlife whether you would then have to take into account both a Smartshare and a Vanguard management fee.

Too many questions and too many options. Unlike you, I'm a very very small investor and brand new to all this so I find myself overthinking everything. I think I just need to pick one then stop looking at all the others ;)

I actually queried Superlife on this one. What they told me is that the smartshare fee is on top of the superlife one but the superlife one is then rebated. IE you pay the highest fee but they do not double dip. Or something to that effect. Do not quote me on it but I called because I was with Smart KIWI for my kiwisaver before superlife took over and was concerned at double dipping. But after the call I my fears were assuaged.
Hope that makes sense. That was for the FNZ and OZY, not too sure how they do the Vanguard ones but there may be a fee on top of a fee there as there is not cross subsidy.... ie did not the NZX (operator of smartshares) take over Superlife or vice versa....

[justakiwi]

OK, apparently Smartshares have a standard PIR of 28%, whereas Superlife has multi rates and I would be able to select 17.5% (my correct rate).

For somebody with a very small investment like me, would that be a major advantage, or would the 28% really not be a big deal?

(I probably should start a new thread to ask this - sorry Demilich!)

Never mind ... I just found out that Superlife charges an annual fee of $33 (on top of their management fee) so that's a deal breaker for me. Smartshares wins.

[Snow Leopard]

...Currently we've been in Asia since February...

Big place Asia - I know I have seen a little of it.

So what countries have you 'done' so far, and where you planning on going next?

Best Wishes
Paper Tiger

Disc: In Singapore next week.

[Demilich]

I actually queried Superlife on this one. What they told me is that the smartshare fee is on top of the superlife one but the superlife one is then rebated. IE you pay the highest fee but they do not double dip. Or something to that effect. Do not quote me on it but I called because I was with Smart KIWI for my kiwisaver before superlife took over and was concerned at double dipping. But after the call I my fears were assuaged.
Hope that makes sense. That was for the FNZ and OZY, not too sure how they do the Vanguard ones but there may be a fee on top of a fee there as there is not cross subsidy.... ie did not the NZX (operator of smartshares) take over Superlife or vice versa....

I didn't realise that - so we're basically paying the Smartshares fee. Seeing as it's common knowledge that Superlife and Smartshares are controlled by the same company, it seems very odd that they advertise the .20 at all - it makes it appear like they are double-dipping, even if they are not. :t_down:


Big place Asia - I know I have seen a little of it.

So what countries have you 'done' so far, and where you planning on going next?

Best Wishes
Paper Tiger

Disc: In Singapore next week.

So far this trip we have been to:

Thailand
Malaysia
Hong Kong
Taiwan
Japan
Vietnam

And currently in Cambodia.

Current plan is to head to Laos, Myanmar and Philippines before stopping back in NZ for a couple of months. Then next year we are hoping to visit some combination of Iran, Sri Lanka and Nepal on the way to Eastern Europe.

We have visited Singapore (and Brunei and Indonesia) on previous trips - it's a great place (albeit expensive compared to most of the surrounding countries).

Of the places we've been, Taiwan was the most underrated - awesome country. Hong Kong is the only one I would be reluctant to return to (excluding Brunei, which really only needs about a single day stop over, unless you are planning some specific jungle trekking or something).

[Snow Leopard]

...So far this trip we have been to:

Thailand
Malaysia
Hong Kong
Taiwan
Japan
Vietnam

And currently in Cambodia.

Current plan is to head to Laos, Myanmar and Philippines before stopping back in NZ for a couple of months. Then next year we are hoping to visit some combination of Iran, Sri Lanka and Nepal on the way to Eastern Europe.

We have visited Singapore (and Brunei and Indonesia) on previous trips - it's a great place (albeit expensive compared to most of the surrounding countries).

Of the places we've been, Taiwan was the most underrated - awesome country. Hong Kong is the only one I would be reluctant to return to (excluding Brunei, which really only needs about a single day stop over, unless you are planning some specific jungle trekking or something).

I live in Malaysia and have lived in Singapore, Indonesia (Java) & Thailand + (5 non-Asian countries)

I have not been to Iran, yet.

I would go back to any those countries including Brunei (one day only - really?) they are all great, though I found the food in the Philippines somewhat disappointing.

Consider North Korea - that is interestingly different.

Best Wishes
Paper Tiger

[justakiwi]

I actually queried Superlife on this one. What they told me is that the smartshare fee is on top of the superlife one but the superlife one is then rebated. IE you pay the highest fee but they do not double dip. Or something to that effect. Do not quote me on it but I called because I was with Smart KIWI for my kiwisaver before superlife took over and was concerned at double dipping. But after the call I my fears were assuaged.
Hope that makes sense. That was for the FNZ and OZY, not too sure how they do the Vanguard ones but there may be a fee on top of a fee there as there is not cross subsidy.... ie did not the NZX (operator of smartshares) take over Superlife or vice versa....

Things may have changed. I actually emailed Smartshares today to ask them about this (and a couple of other things). The person who responded expained that he works for both Superlife and Smartshares and this is what he told me:

"Investing into our fees via SuperLife will only charge you the fees shown on the SuperLife website. The Smartshares fees are taken into account. If you add up all the fees for SuperLife it becomes cheaper when investing around and upwards of $20,000 depending on the fund (because of the $33/year admin fee)."

I find the statement in bold a bit strange - I find it hard to believe the higher Smartshares fee is "taken into account" when setting the lower Superlife fee.

Either way, for me anyway, the annual fee rules Superlife out for me.

[huxley]

Things may have changed. I actually emailed Smartshares today to ask them about this (and a couple of other things). The person who responded expained that he works for both Superlife and Smartshares and this is what he told me:

"Investing into our fees via SuperLife will only charge you the fees shown on the SuperLife website. The Smartshares fees are taken into account. If you add up all the fees for SuperLife it becomes cheaper when investing around and upwards of $20,000 depending on the fund (because of the $33/year admin fee)."

I find the statement in bold a bit strange - I find it hard to believe the higher Smartshares fee is "taken into account" when setting the lower Superlife fee.

Either way, for me anyway, the annual fee rules Superlife out for me.


It's cheaper to invest with Superlife (for amounts over $20k) due to the lower trading costs for the Superlife funds compared to individual investors. Think of them as being wholesale buyers of the NZX ETFs - they basically get a much better deal than anyone investing smaller amounts.

Also keep in mind Smartshares only makes a market for new funds - i.e. they issue new units to people who invest directly with them. You'll need to use a broker if you want to exit.

Either way I don't think there's too much in it compared to saving rate etc etc

[Demilich]

I live in Malaysia and have lived in Singapore, Indonesia (Java) & Thailand + (5 non-Asian countries)

I have not been to Iran, yet.

I would go back to any those countries including Brunei (one day only - really?) they are all great, though I found the food in the Philippines somewhat disappointing.

Consider North Korea - that is interestingly different.

Best Wishes
Paper Tiger

Malaysia is one country where I could see myself settling long term (and it appears currently one of the easiest to do so). And not only because it has the best donuts in the world in Big Apple Donuts. :p

North Korea is on the list of places to go - I'm waiting to see if they start holding the Mass Games again though, as I would like to visit when those are on.

And I have heard the same about the food in the Philippines from others. I think the beaches will more than make up for it however.

[justakiwi]

You'll need to use a broker if you want to exit.


Wouldn't the same thing apply to Superlife?

[huxley]

Wouldn't the same thing apply to Superlife?

Nah, because you don't need to sell the Superlife units (they're not listed like the underlining smartshares).

You just fill in a form and either take the cash as a lump sum or you could take regular withdrawals.

[justakiwi]

Nah, because you don't need to sell the Superlife units (they're not listed like the underlining smartshares).

You just fill in a form and either take the cash as a lump sum or you could take regular withdrawals.

Oh, I didn't realise that. That could be a definite advantage. Might have to think some more on this.