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  1. #161
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    All of the tax goes to themselves. No brainer to be investing heavily in the super fund.

  2. #162
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    Quote Originally Posted by Panda-NZ- View Post
    All of the tax goes to themselves. No brainer to be investing heavily in the super fund.
    The government does get a nice amount of tax from The Super Fund ($2.3 Billion last year) and from Kiwisaver accounts too of course.

    Just 4% of its assets are in NZ equities. I wonder, is that the lowest percentage of any nation's sovereign fund invested in its own country's equities? All while so many successful NZ companies end up relocating to Australia to access funding....

    It seems the Superfund invests more into NZ land if I understand the breakdown correctly!

    https://www.nzsuperfund.nz/news-and-...annual-return/
    https://www.stuff.co.nz/business/126...allenges-ahead
    Last edited by Bjauck; 15-09-2021 at 07:15 AM.

  3. #163
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    Quote Originally Posted by Bjauck View Post
    The government does get a nice amount of tax from The Super Fund ($2.3 Billion last year) and from Kiwisaver accounts too of course.

    Just 4% of its assets are in NZ equities. I wonder, is that the lowest percentage of any nation's sovereign fund invested in its own country's equities? All while so many successful NZ companies end up relocating to Australia to access funding....

    It seems the Superfund invests more into NZ land if I understand the breakdown correctly!

    https://www.nzsuperfund.nz/news-and-...annual-return/
    https://www.stuff.co.nz/business/126...allenges-ahead
    Don't leave out the most important aspect of the Superannuation Fund in the previous linked article:

    "its funding model means that over time Government contributions tend to offset tax paid. Government contributions to the fund over 20201/21 were $2.1 billion with the total tax paid by the fund in the 2020/21 year was $2.3 billion."

    So essentially the Superannuation Fund operates on a tax free basis. On the other hand with Kiwi Saver, unlike individuals over in N. America, there is no tax credit to the person in NZ contributing to Kiwi Saver. I will go to say both funds are not even comparable.

    Capital flows all over the world and NZ should NOT be the only place to consider for any investor. Particularly those KS funds and NZ brokers that are promoting investment in NZ equities. The historic performance of the NZ Superannuation fund is proof that investments in US growth equities does far better than keeping your $ in NZ. Yet in industry, NZ financial advisors and brokers tend to have a different point of view. After all, they get nothing out of it when clients choose to buy US stocks or ETFs.

  4. #164
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    If our stock market was as mediocre as the ASX (0% gain since 2007 vs 400% for NZX) I'd agree.

    In a perfect world there would be no local bias. It will bring new currency into the country when the gains are realised.
    Last edited by Panda-NZ-; 15-09-2021 at 09:20 PM.

  5. #165
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    Quote Originally Posted by SBQ View Post
    Don't leave out the most important aspect of the Superannuation Fund in the previous linked article:

    "its funding model means that over time Government contributions tend to offset tax paid. Government contributions to the fund over 20201/21 were $2.1 billion with the total tax paid by the fund in the 2020/21 year was $2.3 billion."

    So essentially the Superannuation Fund operates on a tax free basis. On the other hand with Kiwi Saver, unlike individuals over in N. America, there is no tax credit to the person in NZ contributing to Kiwi Saver. I will go to say both funds are not even comparable.

    Capital flows all over the world and NZ should NOT be the only place to consider for any investor. Particularly those KS funds and NZ brokers that are promoting investment in NZ equities. The historic performance of the NZ Superannuation fund is proof that investments in US growth equities does far better than keeping your $ in NZ. Yet in industry, NZ financial advisors and brokers tend to have a different point of view. After all, they get nothing out of it when clients choose to buy US stocks or ETFs.
    I am not sure if I would call the superfund operating a tax-free basis. The original capital came from tax receipts, its income is taxed again and subsequent capital contributions come from tax receipts too.

    I agree that NZ should not be the only place to consider for investments. I think NZ should figure more highly than it does for a NZ pension fund. However the small allocation to NZ shares just reflects the share market's relative position for investment in NZ

  6. #166
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    Wife and I are mid 30s and both in KiwiSaver.

    Have own home, a rental property, around 150k combined in KiwiSaver and 20k in a managed index fund.

    So all up 170k in index funds across 3x accounts. They are all invested into Superlife TWF total world fund with from memory 8000+ companies invested in.

    In lieu of the previous comments is there any reason to invest some of this into NZX50 indexes instead?

  7. #167
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    Quote Originally Posted by Panda-NZ- View Post
    If our stock market was as mediocre as the ASX (0% gain since 2007 vs 400% for NZX) I'd agree.

    In a perfect world there would be no local bias. It will bring new currency into the country when the gains are realised.

    I'm not sure it is as clear cut as that. The NZX50 has ostensibly outperformed the ASX200 by far on a price basis, but then the former presupposes the reinvestment of dividends, while the latter does not (like most major indices). The total return on the ASX200 has trailed the NZX50 by two to three pre cent per annum on a five and ten year basis (I'm not sure about since 2007 in particular) - which is still a notable difference on a compound basis.

  8. #168
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    Food for thought

    "Barry isn't your typical retiree. As a self-described "natural risk-taker", Barry has repeatedly put it all on the line to survive and thrive in the face of the challenges life has thrown at him and, most of the time, he has reaped the rewards. "
    https://www.livewiremarkets.com/wire...to-take-a-risk

  9. #169
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    Quote Originally Posted by kiora View Post
    Food for thought

    "Barry isn't your typical retiree. As a self-described "natural risk-taker", Barry has repeatedly put it all on the line to survive and thrive in the face of the challenges life has thrown at him and, most of the time, he has reaped the rewards. "
    https://www.livewiremarkets.com/wire...to-take-a-risk
    Yes it's stories like these that say if you want to get rich, you got to take risks. He also describes he never borrows $ to buy shares. To me I find this a loss opportunity as the window of opportunity (ie peak of the share market crash) can only last 1 or 2 days. If your brokerage account does not allow you the ability to margin trade, then quite simply you are going to miss out on real investment gains. On countless times i've done margin to purchase at times of peak crisis - and to fund the account with cash in the following week or month (which takes the account out of margin).

    Barry is also correct that the investment industry is never going to look out in best interest for the client. Regulations is not about that. Regulations is about so there's no fraud but has no regard in terms sub-optimal or exceptional performance. Here in NZ Kiwi Saver is not going to get you the latter. Just recently I noticed on talk radio these ads by Kiwi Saver funds ANZ and Fisher Funds etc. misconstruing the public about the investing. The ANZ example was how a 'passive fund' does worse than an 'actively managed fund'. This is such a crock of s**t how actively managed funds can make such claims. Warren Buffet has spoken well about this for decades and no one has proven him wrong:

    https://youtu.be/FDxfyX_ESuE

    https://youtu.be/xp9KUCel778

    If people understood what Buffet is saying, then they would not be in investment schemes like Kiwi Saver. That's because KS has frictional costs and taxation. Your employer matches 3% but that 3% is negated by high fund mgt fees, in addition RWT and hidden FIF if those funds invest offshore. And no fund manager is going to advise a client to buy the Vanguard S&P500 ETF because that's not how they make their money. Active management means they get paid so they can try to time the markets, time what stocks to buy, or as Buffet calls them the "Hyperactives".

    So it's certainly clear in that article, Barry has realised you can't fully leave all your funds under some form of active management.

  10. #170
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    Also there's the currency part. In a crisis the dollar goes down protecting you from losses when in a currency unhedged fund.
    Last edited by Panda-NZ-; 06-11-2021 at 10:34 PM.

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