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  1. #141
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    Quote Originally Posted by Stumpynuts View Post
    Milford KS - Aggressive fund here - 90% aggressive, the remaining 10% in active growth.
    I'm sure this is mostly a one-off COVID related return, but the website link for Milford that Kiora already posted up - 36.22% return, after fees but before tax as at the end of April 2021 year

    https://milfordasset.com/funds-perfo...ggressive-fund

    All the selling pre & during the beginning of pandemic scared away a lot of money - realising those losses from paper to actual.
    That is a fantastic return of 19.75% pa since inception on 1/8/19 - Almost double the return from the NZX50 in that period. As most of it would be from capital gains/appreciation I think it would be little diminished by PiE tax.

  2. #142
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    Quote Originally Posted by Bjauck View Post
    That is a fantastic return of 19.75% pa since inception on 1/8/19 - Almost double the return from the NZX50 in that period. As most of it would be from capital gains/appreciation I think it would be little diminished by PiE tax.
    Yeah it's not bad right?
    Milford has always been one of the more consistent and higher returning KS managers. With those sort of annualised returns I don't mind paying a little bit more in management fees if you're getting substantially higher double-digit returns.

  3. #143
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    So the default providers who lost their status actually lose the clients who were placed with them!!! I'm a bit surprised coz that is verging on the punitive.

    Those in default funds managed by organisations losing their default manager status will be automatically shifted to one of the ongoing providers unless they actively choose a manager.

    Lower KiwiSaver default fund fees, performance seemingly ignored | BusinessDesk (paywalled)

    The main thrust of the article though is how myopic the govt was in only considering fees.... even with my financial planning training I still think its best to pay a bit more and get quality active management.

    Fisher Funds was first outright but cast out from the default selection


    Fisher Funds chief executive Bruce McLachlan said his company was surprised and disappointed at not making the cut, given its strong track record, but stressed that the default fund was only one aspect of its KiwiSaver business.
    "We're proud of the returns and value for money we have delivered for our KiwiSaver members since 2007," McLachlan said.
    "Our default fund has consistently outperformed peer group averages and, after fees, ranks first or first equal on the one, three and five-year results, based on Morningstar results," he said.
    For clarity, nothing I say is advice....

  4. #144
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    Quote Originally Posted by peat View Post
    So the default providers who lost their status actually lose the clients who were placed with them!!! I'm a bit surprised coz that is verging on the punitive.

    Those in default funds managed by organisations losing their default manager status will be automatically shifted to one of the ongoing providers unless they actively choose a manager.

    Lower KiwiSaver default fund fees, performance seemingly ignored | BusinessDesk (paywalled)

    The main thrust of the article though is how myopic the govt was in only considering fees.... even with my financial planning training I still think its best to pay a bit more and get quality active management.

    Fisher Funds was first outright but cast out from the default selection


    Fisher Funds chief executive Bruce McLachlan said his company was surprised and disappointed at not making the cut, given its strong track record, but stressed that the default fund was only one aspect of its KiwiSaver business.
    "We're proud of the returns and value for money we have delivered for our KiwiSaver members since 2007," McLachlan said.
    "Our default fund has consistently outperformed peer group averages and, after fees, ranks first or first equal on the one, three and five-year results, based on Morningstar results," he said.
    Hi Peat , the way I read it unless the default provider can make contact and transfer them into one of their other funds they would then lose it .
    I think FMA had been on at them for a while to make contact with the client and see if they might be better suited in a higher or slightly higher risk fund ....
    Be very interesting to see how many of them they can suddenly make contact with and get them into a balanced fund
    As of 31 March ASB had $ 4.1 Bio in their default fund , AMP $ 1.3 bio and ANZ 1.2 Bio
    https://cdn.morningstar.com.au/mca/s...vey-2021Q1.pdf

  5. #145
    Senior Member justakiwi's Avatar
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    Never mind.

  6. #146
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    Quote Originally Posted by stoploss View Post
    Hi Peat , the way I read it unless the default provider can make contact and transfer them into one of their other funds they would then lose it .
    I think FMA had been on at them for a while to make contact with the client and see if they might be better suited in a higher or slightly higher risk fund ....
    Be very interesting to see how many of them they can suddenly make contact with and get them into a balanced fund
    As of 31 March ASB had $ 4.1 Bio in their default fund , AMP $ 1.3 bio and ANZ 1.2 Bio
    https://cdn.morningstar.com.au/mca/s...vey-2021Q1.pdf

    In my early years of finance studies (nearly 25 years ago), the level of risk the individual should make would depend on their age. Meaning the so called 'default' fund in these Kiwi Saver funds do a poor job of addressing the age status situation for those investing for retirement. Why is this not considered? Does the FMA use age as a factor when they scold at KS funds having poor performance on their default providers managed funds?

    What are the make up of these KS funds in terms of risk level? The mgt fees they take is an issue if they're only tweaking % proportions of their investments into fixed income / bonds to equity ratio. What I see is industry gives out awards to these fund managers for merely just tweaking things around or doing more diversification and by luck, they do better, they win. There's no 'real' art into their level of stock picking but they sure do know how to rake in the advertising.

  7. #147
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    "As we have seen recently, when market corrections occur some KiwiSaver members have realised losses by switching to options that are more conservative. Access to good advice will also be an important contributor to KiwiSaver member outcomes, and hopefully help not only getting Kiwis into the right funds, but keeping them there through the good and not so good market outcomes"
    https://www.goodreturns.co.nz/articl...or+10+Sep+2021

  8. #148
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    Quote Originally Posted by kiora View Post
    "As we have seen recently, when market corrections occur some KiwiSaver members have realised losses by switching to options that are more conservative. Access to good advice will also be an important contributor to KiwiSaver member outcomes, and hopefully help not only getting Kiwis into the right funds, but keeping them there through the good and not so good market outcomes"
    https://www.goodreturns.co.nz/articl...or+10+Sep+2021
    I'm afraid I will have to disagree with the outcome of Kiwi Saver in that article. This one particularly:

    "A number of commentators have said KiwiSaver is not a good savings vehicle but, simply put, they are wrong. Many overseas countries have looked at our system and endeavoured to try to replicate it in some way or another over the past few years. I know for a fact Ireland are interested in how it works."

    I would be interested to know which countries would regard NZ's KS so great? Certainly not in the US and definitely not in Canada. The key distinction about KS (when compared to other employer contribution plans overseas) is how IRD taxes individuals on the fund's gains. The approach has been taxing the gains at the start and not taxing the gains at the end at retirement. When you take taxation out, this leaves less 'compound' returns. The key advantage to US's 401K plans and Canada's RRSP is ALL the contributions grow 100% tax free. In addition the amount of contributions is a direct deduction of the person's taxable income. When retirement comes, YOU CHOOSE how much income and tax you would like to have in a year when you make disbursements ; ie structure so you're retirement income is taxed at the low tax bracket. In KS, the higher the income, the higher YOUR KS returns are taxed. If there is no disincentive than that, then I can understand why the details are rarely spoken about in NZ or why financial advisors don't disclose the full tax workings of the funds and from the client's point of view. But I suppose I should not be so critical to NZ. KS was a start of a system that most OECD nations already had decades before. In Canada, the individual has 3 sources of pension. OAS which is like our NZ Super. CCP which everyone employed pays (there's no NZ equivalent). RRSP which would be comparable to our KS. Also for many professions in Canada they have their own investment retirement plan - such as the Teachers where they pay into a Teacher's Retirement scheme. End result a teacher can retire with 4 income streams ; OAS, CPP, RRSP, & Teacher Pension income.

    Putting these key advantage aside, here's my thoughts on the following from the article (one's with my concerns):

    What are the stand-out benefits of KiwiSaver today?



    • If you put 3% of your salary or wages in, your employer, in most circumstances (more to come on this) have to match that. No ifs or buts. If they do not, they are breaking the law.

    - seriously putting 6% of the individuals income is a joke and it won't get you to riches for the vast majority of people in KS. In Canada individuals can max at out 18% and these contributions are a direct credit off the taxable income.


    • The Government will give you an extra $521 dollars a year every year (until you reach retirement age) if you put in a minimum of $20 dollars a week. Think of it as a 50% return on those contributions every year!

    - the gov't and financials advisors call this an incentive to join KS, to me I call this a bribe.


    • For those who are first homebuyers you can use your KiwiSaver funds (excluding the $1,000 kick start if you were lucky to get that at the time) to go towards your first home. It is one of the quickest ways you can build up a deposit because it is not only your contributions but your matching employer and government contributions that can be used to get there quicker.

    - in Canada the Home Buyer's Plan allows the individual to withdraw up to $35K from their RRSP. Keep in mind, contributions to the RRSP reduce the person's taxable income, and is compounded in the investment tax free (the notion that at retirement, the CGT applies however, $35K is withdrawn with no tax penalty). This is very different to KS or PIE funds where gains are taxed annually at RWT.


    • The government has recently reviewed KiwiSaver default providers and we have got one of the lowest range of investment management fees in the world. This is even more remarkable given we only have around $62 billion of funds compared to say Australia that has $3 trillion of funds under management and their fees are higher than ours. So big tick there.

    - the investment mix whether default, aggressive, conservative, is all a bunch of rubbish. You don't relegate the investment risk based on the % proportion in fixed term investments (bonds, term deposits, etc) as a ratio to the equity investment. Instead, the investment make up should be based on the individual's age and with a slight consideration of when a stock market has crashed or not. Those younger should take on more risk and go all in 100% equity. Those near retirement age, go the other way around and have a small % in equities. Of course if you're like Warren Buffet and all the famous gurus - they say fixed income investments are a waste of time one should staying invested in equities all the time.

    The article goes on asking why some don't join KS. I say the key reason is they may be people who are already wealthy enough and can invest directly with their own savings... ie such as buying NZ houses - leverage it through the bank kind of deal that you can't do in KS. As a friend once told me, "Kiwi Saver is only for people who can't manage their own savings and invest... but the people that know how to get rich, don't do so with KS".

  9. #149
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    Quote Originally Posted by SBQ View Post
    I'm afraid I will have to disagree with the outcome of Kiwi Saver in that article. This one particularly:

    "A number of commentators have said KiwiSaver is not a good savings vehicle but, simply put, they are wrong. Many overseas countries have looked at our system and endeavoured to try to replicate it in some way or another over the past few years. I know for a fact Ireland are interested in how it works."

    I would be interested to know which countries would regard NZ's KS so great? Certainly not in the US and definitely not in Canada. The key distinction about KS (when compared to other employer contribution plans overseas) is how IRD taxes individuals on the fund's gains. The approach has been taxing the gains at the start and not taxing the gains at the end at retirement. When you take taxation out, this leaves less 'compound' returns. The key advantage to US's 401K plans and Canada's RRSP is ALL the contributions grow 100% tax free. In addition the amount of contributions is a direct deduction of the person's taxable income. When retirement comes, YOU CHOOSE how much income and tax you would like to have in a year when you make disbursements ; ie structure so you're retirement income is taxed at the low tax bracket. In KS, the higher the income, the higher YOUR KS returns are taxed. If there is no disincentive than that, then I can understand why the details are rarely spoken about in NZ or why financial advisors don't disclose the full tax workings of the funds and from the client's point of view. But I suppose I should not be so critical to NZ. KS was a start of a system that most OECD nations already had decades before. In Canada, the individual has 3 sources of pension. OAS which is like our NZ Super. CCP which everyone employed pays (there's no NZ equivalent). RRSP which would be comparable to our KS. Also for many professions in Canada they have their own investment retirement plan - such as the Teachers where they pay into a Teacher's Retirement scheme. End result a teacher can retire with 4 income streams ; OAS, CPP, RRSP, & Teacher Pension income.

    Putting these key advantage aside, here's my thoughts on the following from the article (one's with my concerns):

    What are the stand-out benefits of KiwiSaver today?



    • If you put 3% of your salary or wages in, your employer, in most circumstances (more to come on this) have to match that. No ifs or buts. If they do not, they are breaking the law.

    - seriously putting 6% of the individuals income is a joke and it won't get you to riches for the vast majority of people in KS. In Canada individuals can max at out 18% and these contributions are a direct credit off the taxable income.


    • The Government will give you an extra $521 dollars a year every year (until you reach retirement age) if you put in a minimum of $20 dollars a week. Think of it as a 50% return on those contributions every year!

    - the gov't and financials advisors call this an incentive to join KS, to me I call this a bribe.


    • For those who are first homebuyers you can use your KiwiSaver funds (excluding the $1,000 kick start if you were lucky to get that at the time) to go towards your first home. It is one of the quickest ways you can build up a deposit because it is not only your contributions but your matching employer and government contributions that can be used to get there quicker.

    - in Canada the Home Buyer's Plan allows the individual to withdraw up to $35K from their RRSP. Keep in mind, contributions to the RRSP reduce the person's taxable income, and is compounded in the investment tax free (the notion that at retirement, the CGT applies however, $35K is withdrawn with no tax penalty). This is very different to KS or PIE funds where gains are taxed annually at RWT.


    • The government has recently reviewed KiwiSaver default providers and we have got one of the lowest range of investment management fees in the world. This is even more remarkable given we only have around $62 billion of funds compared to say Australia that has $3 trillion of funds under management and their fees are higher than ours. So big tick there.

    - the investment mix whether default, aggressive, conservative, is all a bunch of rubbish. You don't relegate the investment risk based on the % proportion in fixed term investments (bonds, term deposits, etc) as a ratio to the equity investment. Instead, the investment make up should be based on the individual's age and with a slight consideration of when a stock market has crashed or not. Those younger should take on more risk and go all in 100% equity. Those near retirement age, go the other way around and have a small % in equities. Of course if you're like Warren Buffet and all the famous gurus - they say fixed income investments are a waste of time one should staying invested in equities all the time.

    The article goes on asking why some don't join KS. I say the key reason is they may be people who are already wealthy enough and can invest directly with their own savings... ie such as buying NZ houses - leverage it through the bank kind of deal that you can't do in KS. As a friend once told me, "Kiwi Saver is only for people who can't manage their own savings and invest... but the people that know how to get rich, don't do so with KS".



    Those are exactly the people that Kiwisaver is designed for. Probably the vast majority of the population.

  10. #150
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    Quote Originally Posted by Swala View Post
    [/B]


    Those are exactly the people that Kiwisaver is designed for. Probably the vast majority of the population.
    As I dig for answer, how MUCH does KiwiSaver actually help these individuals? Consider it from an aggregate point of view. The fund managers that take their commissions, admin mgt fees, and IRD's taxation on these funds, paperwork involved by the employer, etc. Since the start of KS, to the person that gets 6% of their taxable income into this scheme, how much exactly do they have today and let's see their NET returns? Since we can assume the majority of people would be on average to low income levels - ie $50K/year @ 6% contribution is only $3000/year (and I can assure you these figures would be A LOT less when KS was introduced), we are seriously not talking significant sums to make them millionaires at retirement. Someone should look

    I'm going to discredit that guy in that article link and say he's just another salesman working in industry to fuel the investment firm he represents. I mean how many industries can you name were a person is getting paid (for merely doing nothing) because that is accepted industry practice and the gov't and regulatory supports that role? Don't agree with me, here's Buffet's comments over 20 years ago:

    https://youtu.be/uRdDwgmzLvU?t=48

    In Buffet's shareholder meeting he was given the question, on what advice he can provide to a school classroom full of equity fund managers. His response was, "In this world there's a saying you can't get something for nothing... well the truth is in aggregate, investment managers have essentially got something for nothing" and he carries on what he would say to that class of graduating fund manager, "for their psychological well being they should probably leave the room". Buffet made notable mention how the individual retail investor can simply do better than the actively managed fund by simply investing in a low cost index ETF. Oh boy did I laugh when I saw a NZ TV commercial on how active fund managers are so good and in their interpretation, better than the passive fund managers.

    Why is it in NZ, the trend has always been handling one's investment through investment managers while in N. America, the trend is huge shifts from the actively managed, to a passive approach into low cost ETF index funds like Vanguard's VOO ?

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