Kiwi Saver Changes

[Timesurfer]

"From next Wednesday, December 1, default users will be put into balanced funds - providing medium to high returns with medium to high risk."
https://www.newshub.co.nz/home/money/2021/11/explainer-the-key-december-1-kiwisaver-changes-you-need-to-know-about.html

What do we think this impact will have in what some might call an overcooked market?

[Jay]

Mainly will only affect those who draw on it for first home purchase and alot of the others won't even notice I would think, otherwise they would have 'moved" the fund to another fund/provider by now

[Rawz]

"From next Wednesday, December 1, default users will be put into balanced funds - providing medium to high returns with medium to high risk."
https://www.newshub.co.nz/home/money/2021/11/explainer-the-key-december-1-kiwisaver-changes-you-need-to-know-about.html

What do we think this impact will have in what some might call an overcooked market?

I am sure I have heard if you only invested at the peak of the market over last 50 years or so you would still average an 8% return. Maybe it was 6%? Anyways, its time in the market not timing the market

[777]

The powers of the IRD. What right do they have to change Funds for existing payers? New ones fair enough but some of the old default ones are better than the new ones.

[Onion]

The powers of the IRD. What right do they have to change Funds for existing payers? New ones fair enough but some of the old default ones are better than the new ones.

They already choose a provider for all KiwiSaver holders that elect not to choose themselves. So their rights are the same as they have always been.

They will only shift the holders that have never made a choice themselves.

And your opinion about “better” is just different to their opinion.

The change to have balanced funds as the default (instead of conservative) is a good one.

[Timesurfer]

I wasn't so much thinking of the investors as to what impacts we might see in the market. It will see more money moving to stocks than bonds. Not sure how quick the transactions will occur.

[Jaa]

What is the average weighting to NZ shares of balanced funds vs the default funds?

Looking at one ASB, one of the bigger providers, their conservative fund has 7.5% allocated to Australasian equities and increases to 25% for their balanced fund.

Had a look at ANZ's balanced fund too, their biggest holding was FPH at 1% with Mainfreight also in the top 10.

[Panda-NZ-]

Bonds are crap and the bond market has been rigged by central banks to its detriment (unlike shares where it has been positive).