Kiwisaver Strategy

[audiav]

I do have a Kernel account, only hold Global 100 and Infrastructure unhedged

Sorry Jaa, just realised you were asking who my Kiwisaver provider is, it is Milford Growth, like Iceman. I’ve been with them since 2009.

[Bjauck]

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.

[Ricky-bobby]

I’m the same, just pulled some back from aggressive to balanced… 50% growth, 25% balanced, 25% aggressive

[Snoopy]

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.

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 morgtages'? 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 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. While handy for providing access to liquidity for opportunity, as a long term investment class, cash has traditionally provided the lowest returns. High interest rates are likely providing a sweet spot for cash investments right now, that one would not expect to see in 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 though 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.

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