Where to invest?

[Sideshow Bob]

What is everyone's thoughts on Kiwisaver as in investment option? It's beneficial to me as I'm yet to purchase my first home (so can pull it for that), and the benefits of my employer matching my contributions make it worthwhile in my eyes.

Guaranteed 100% return is hard to get anywhere......

And while retirement is a long way off, the power of compounding interest is huge - especially starting early, with a 30-40 year timeline. Yeah, there are disadvantages with having it locked in - but is a set & almost forget type of thing - look at it once/twice a year to ensure fund is performing OK and right for your investment mix.

[pierre]

You should contribute the minimum to Kiwisaver that qualifies to get any government subsidy and the full employer contribution. Investments beyond that level should be directed somewhere that offers flexibility - i.e. the ability to invest in a house or a business or whatever investments come along in future.

My main point is that additional investments should NOT go to Kiwisaver as there are too many restrictions.

Of course, if you have additional funds to invest and you're happy with the returns your Kiwisaver provider is achieving, you can always open a non-Kiwisaver account with them that will allow access if/when required.

[minimoke]

My main point is that additional investments should NOT go to Kiwisaver as there are too many restrictio.ns.

I totally agree with that point. I dont think the returns in Kiwsaver accounts are particularly spectacular. Balanced funds around 7%, Growth around 9% and conservative around 5%. I reckon put in as much as you need for tax / employer benefits (because there is no way you can better that as a return) but after that make sure any extra cash goes into your own separately managed portfolio. Put the 1.5% in fees into your own hands

[tobo]

I use kiwisaver as part of my diversification strategy:
Fantastic return (care of govt) and super conservative exposure to global markets (even the 'growth" funds have EFTs, currency hedges and the likes of Komatsu, Google and Citigroup).
I don't buy pure property shares because my house provides exposure to that market.
So the rest can be a wide range of NZ and Aus shares (mixture of industries and risk levels including the usual suspects and some left field ones from Aus).

[Beagle]

Especially for my good mate Couta1...I boosted my diversification ever so "slightly" today. Bought some units in TWF, Total World fund listed on the NZX. Easy $Kiwi investment in smartshares and owns units in Vanguard Total world fund ETF which holds over...wait for it...this is not a typo...9,000 shares in different countries around the world...so I have one piece of beagle fur invested in each company Made an easy "no effort whatsoever required on the part of unit holders" 25% last year. Average return for the last decade has been just over 11% per annum which is pretty impressive.

[Joshuatree]

Thats interesting, Roger hadn't seen that. Even though ETF's have low fees ( often re 0.3%)there will two layers of fees here,How does that stack up with TWF fees added on?

[Joshuatree]

Found it TWF charge 0.56%
Vanguard expense ratio 0.11 %, pretty sharp. Unit trusts still around? Investment advisors prob still mourn the good old high fee days plus trailing fees etc.

[GTM 3442]

Where to invest?

This year it's India (NYSE:INCO Columbia India Consumer ETF), global infrastructure (RARE), and the PIMCO BOND ETF.

Possibly global property (excl US) with a predilection for industrial, as I think that retail (malls) property is going to do poorly with the closure of the US chain stores.

And maybe a little more into Europe if the STOXX 600, SMI & DAX keep trucking on.

In New Zealand, it's probably limited to well-rated bonds at time of issue to hold to maturity. And bottom-feeding anything decent that has a black swan knock at the door.

[flyer]

Beagle - when you say you invested in TWF, do you just buy a quantity and leave it alone or do you do a regular purchase of more. Same with all those buying into ETF's, do you all do regular contributions. I just had a look at TEM etc, been great over the last 2 years as has TWF. I may get some to compliment my Kiwisaver. Currently hold AIR, ATM, CEN, OCA, SKC and TGH.

[Beagle]

Beagle - when you say you invested in TWF, do you just buy a quantity and leave it alone or do you do a regular purchase of more. Same with all those buying into ETF's, do you all do regular contributions. I just had a look at TEM etc, been great over the last 2 years as has TWF. I may get some to compliment my Kiwisaver. Currently hold AIR, ATM, CEN, OCA, SKC and TGH.

I'm looking at buying a quantity and leaving it alone, (but may add more from time to time) but if you go onto www.smartshares.co.nz they have options for regular monthly contributions which could suit some people in terms of dollar cost averaging their investment over time. I really think the left wing green coalition with Winston Peter's...the grand social experiment if you like, is going to sap business confidence this year and could stifle economic growth a bit so I am looking at repositioning some of my portfolio into overseas funds. TEM had had great performance but the portfolio manager has just resigned so unsure about who will be appointed so some caution there is warranted and they are stock pickers too so the skills of the new portfolio manager will affect future returns and emerging markets make up just 9% of the global market so this fund is higher risk than TWF. TWF are an ETF so just track the world index but with over 9,000 shares is a very easy way in $N.Z. dollars to invest in a very very broad range of stocks from all regions. You can buy on market or invest direct through the smartshares website. Note, if you invest direct with smartshares, their next monthly allocation for want of a better word is 22 January and your application and funds need to be with them by then. They then allocate new units based on the net asset value at the end of the month, (January). One off $30 fee for first investment, thereafter nil. If you want to participate in this global rally before the end of this month you need to buy the units on market.