Which Kiwisavers do you rate?

[minimoke]

Why am I not surprised no refernce had been made to this: http://www.morningstar.co.nz/s/docum...rvey130122.pdf

[Anonymous]

Does anyone have a view on how this new Kiwisaver provider Generate will go? http://www.generatekiwisaver.co.nz/

They invest only in hedge funds. Just an excuse to charge higher fees or could they be onto something?

[Joshuatree]

Well its been great to read all these threads. Progress report , i still havn't signed up with any one; but right now am enjoying the effects of a single gin and tonic. Wasn't long ago i could not drink at all due to Gerd symptons so just one is having the effect of half a bottle. Im 58 so prob would pay to participate. Anywhichway my bro sent me this;"Dark matter is love and, love matters.

[lou]

Does anyone have a view on how this new Kiwisaver provider Generate will go? http://www.generatekiwisaver.co.nz/

They invest only in hedge funds. Just an excuse to charge higher fees or could they be onto something?

There fees seem very high for what they are doing. They take a 1% management fee and they are not directly managing your money. They are investing with other managers who will be charging fees as well.

[minimoke]

Hi there, firstly thanks everyone for the helpful advice. Secondly, re the Morningstar report minimoke, Ive read these a few times before, just checking though, is Morningstar's report typically the best out there in profiliing all the providers and their returns? Cheers.

I don't know about the best, but as far as I'm aware its pretty much the only one that attempts to compare apples with apples. There are so may providers with so many different fee structures with a variety of investment options and fund sizes its not an easy task. As they always say with these types of reports (an the individual provider reports) "past performance is no guarantee of future performance"

[p2r]

2012 Superlife NZ shares made 37% after fees. Probably similar to Milford if you think milford is not 100% nz shares. Superlife did well with their PEB though so may be a one off.

http://www.superlife.co.nz/superlife...uary-2013.html

http://www.interest.co.nz/kiwisaver/performance-ranking

I use Milford Active Growth and recommend them.

Milford Active
Growth KiwiSaver has also easily been the top-performing
overall KiwiSaver fund over the past five years - Morningstar

http://milfordkiwisaver.co.nz/perfor.../fund-updates/

AA

[winner69]

http://www.nzherald.co.nz/business/n...ectid=10893099

So not Kiwibank/Gareth Morgan

Methinks it is the one that the has had previous 'disgreements' with the regulators ..... and one that many are more than satisified with on this thread

[CJ]

Bremner said it was unfortunate the recent announcements had created "a game of guess who?" in the industry and amongst investors.

"But it's unfortunate that a minor matter has been played out in the press in the manner that it has." The FMA has declined to name the two providers and has said its problems in the offer documents were "at the compliance end" of its regulatory scale.

What an arse - he makes the situation worse by ruling their funds out as if everyone did it, only the 2 'guilty' funds would be left without an announcement.

[Alz99]

I've recently been looking into this, im 35 and noted the fee calculator today on https://www.sorted.org.nz/calculators/kiwisaver-fees
does anyone know about the Mercer Super Trust KiwiSaver scheme ??? says they have 0% fees.. seems too good to be true?

can anyone offer any advice?

[stoploss]

I've recently been looking into this, im 35 and noted the fee calculator today on https://www.sorted.org.nz/calculators/kiwisaver-fees
does anyone know about the Mercer Super Trust KiwiSaver scheme ??? says they have 0% fees.. seems too good to be true?

can anyone offer any advice?

very difficult to give advice these days and stay within the law without the right qualifications , disclosures , and research on client .
Have a look at http://www.morningstar.com.au/s/docu...rvey2015Q4.pdf

This will show you over the last 5 years who has a good track record. Past performance is no guarantee of future performance. However the guys/girls in the top 3 on the active growth must be doing something right when you compare them to some of the lower performing funds ..... Don't get too caught up in the free fees .. I'd rather be making 14 % PA and paying a reasonable fee, than paying nothing and only getting 6 % .
Think of your fund manager as a sports team ...who would you back to win the World Cup , NZ or Tonga .

[mfd]

This will show you over the last 5 years who has a good track record. Past performance is no guarantee of future performance. However the guys/girls in the top 3 on the active growth must be doing something right when you compare them to some of the lower performing funds ..... Don't get too caught up in the free fees .. I'd rather be making 14 % PA and paying a reasonable fee, than paying nothing and only getting 6 % .
Think of your fund manager as a sports team ...who would you back to win the World Cup , NZ or Tonga .

I won't pretend to have done a full literature search, but everything I've read on the subject agrees that past performance really is no guarantee of future performance (example http://papers.ssrn.com/sol3/papers.c...act_id=1578808) and that on average actively managed funds perform worse than index investing (due essentially to increased costs, UK centred example https://www.institutional.vanguard.c...vesting-uk.pdf). So the average active fund does badly, and you can't tell which the above average funds will be.

I don't have a kiwisaver just yet (not a full resident yet), but when I do I'm planning to build a Superlife index portfolio, mostly of overseas shares, as they're cheapest. Higher fees are the only thing I can be absolutely sure about that will impact on my returns. 1% versus 0.5% doesn't sound like a lot, but if you made 5% returns one year, the difference is 10% of your profit, which winds up being a huge amount of money over time. It's also worth pointing out I'm a huge hypocrite as I actively manage my own portfolio outside of kiwisaver but I only have myself to blame for what happens there, and although trading costs are significant I don't have to pay a %age just to hold what I already own.

The Mercer example looks like it's a gremlin in the sorted system, they definitely quote fees on their website https://secure.superfacts.com/web/IW...tionsFlyer.pdf

[Alz99]

very difficult to give advice these days and stay within the law without the right qualifications , disclosures , and research on client .
Have a look at http://www.morningstar.com.au/s/docu...rvey2015Q4.pdf

This will show you over the last 5 years who has a good track record. Past performance is no guarantee of future performance. However the guys/girls in the top 3 on the active growth must be doing something right when you compare them to some of the lower performing funds ..... Don't get too caught up in the free fees .. I'd rather be making 14 % PA and paying a reasonable fee, than paying nothing and only getting 6 % .
Think of your fund manager as a sports team ...who would you back to win the World Cup , NZ or Tonga .

thanks .. love this site for info appreciate it.. @stoploss & @mfd

seems like ill be changing over to superlife and bringing my partners super over from Australia

[p2r]

Superlife NZ and to some extent Aus shares, property is the most tax efficient as not paying tax on capital gains and getting imputation credits. That makes a difference too.

Also thinking of trying to change my life insurance to them as they are NZ based, no commission and no broker hard sell.

[RRR]

Simplicity - the new low-cost, not-for-profit Kiwisaver provider (from Sam Stubbs) - 0.3% fund management fee for all funds (growth, balanced, conservative) + $30/year.
All investments hedged to NZ dollar - hedging fee is extra but wont be much I think.

I will consider switching!

[stoploss]

Simplicity - the new low-cost, not-for-profit Kiwisaver provider (from Sam Stubbs) - 0.3% fund management fee for all funds (growth, balanced, conservative) + $30/year.
All investments hedged to NZ dollar - hedging fee is extra but wont be much I think.

I will consider switching!

Unless you are in conservative , this does not make sense to me .
Surely the overall performance is of more importance . So I am happy to pay A bit more to get better performance .
Compare the 5 year return of the top Growth funds vs the bottom ones . I have been happy with my Milford returns .

[mfd]

Unless you are in conservative , this does not make sense to me .
Surely the overall performance is of more importance . So I am happy to pay A bit more to get better performance .
Compare the 5 year return of the top Growth funds vs the bottom ones . I have been happy with my Milford returns .

I'd be interested to see the evidence that recent good performance predicts future performance. I know it's intuitive but that doesn't mean it's true. Here's some suggesting low fees are the best predictor of future performance

http://news.morningstar.com/articlen...aspx?id=347327

"Expense ratios are strong predictors of performance. In every asset class over every time period, the cheapest quintile produced higher total returns than the most expensive quintile"

Here's another interesting article:

http://www.obliviousinvestor.com/choosing-funds-low-costs-or-high-past-performance/

"picking funds based on superior past performance proved to be less successful than picking randomly"

[stoploss]

I'd be interested to see the evidence that recent good performance predicts future performance. I know it's intuitive but that doesn't mean it's true. Here's some suggesting low fees are the best predictor of future performance

http://news.morningstar.com/articlen...aspx?id=347327

"Expense ratios are strong predictors of performance. In every asset class over every time period, the cheapest quintile produced higher total returns than the most expensive quintile"

Here's another interesting article:

http://www.obliviousinvestor.com/choosing-funds-low-costs-or-high-past-performance/

"picking funds based on superior past performance proved to be less successful than picking randomly"

I should have put that disclaimer in there about past performance . I look at it in a sporting way maybe Milford have the financial equivalent of the All Blacks working for them and some of the bottom ranked funds ( comparing like funds) the Wellington Lions ....
I note that article is 2010 , say I have 100 K in my Kiwisaver, what would the opportunity cost have been with some of the cheaper providers over the past 6 years .

https://milfordasset.com/milford-top...isaver-survey/

[mfd]

I should have put that disclaimer in there about past performance . I look at it in a sporting way maybe Milford have the financial equivalent of the All Blacks working for them and some of the bottom ranked funds ( comparing like funds) the Wellington Lions ....
I note that article is 2010 , say I have 100 K in my Kiwisaver, what would the opportunity cost have been with some of the cheaper providers over the past 6 years .

https://milfordasset.com/milford-top...isaver-survey/

No argument, the best fund to have been in for the last 5 years is the fund that performed the best. The trouble is there doesn't seem to be any actual evidence to be able to extrapolate that into the future. It's a leap of faith. The second article I posted had an interesting section that really poor performance probably predicts future poor performance, but once you get out of the dross I think they're all essentially monkeys throwing darts at a list of stocks.

We all make our own decisions, I'll be taking a close look at simplicity as it's looking cheaper than my current superlife mix and ends up invested in the same Vanguard funds at the end of the day. Of course as they're index funds they'll never be top of the tables, but they also won't be able to drop any major clangers, and on average can be expected to perform better than the average actively managed fund (due to lower fees).

[RRR]

Low cost index fund would surely beat the majority of managed funds especially in developed (discovered) markets. Active management is costly. The difference would be profound esp in bear markets - you lose 1-2% (active management fees) vs 0.3-0.5 for index fund.

Fiona McKenzie of NZ super fund is also a big fan of index funds - according to her keep the expense as low a possible and that would make a big difference in the long term. Only a small proportion of NZ super fund is actively managed.

[smpl]

Simplicity - the new low-cost, not-for-profit Kiwisaver provider (from Sam Stubbs) - 0.3% fund management fee for all funds (growth, balanced, conservative) + $30/year.
All investments hedged to NZ dollar - hedging fee is extra but wont be much I think.

I will consider switching!

I think any provider offering international equities exposure at low cost is on the right track. The website is fresh and I hope they do well.

From their Product Disclosure Statement:

While we have a policy of hedging overseas investments 100% to the NZ dollar, on a before tax basis,
there may be fluctuations in value, and the actual percentage may vary. There may also be additional
requirements to pay for the cost of hedging if the NZD is more volatile than predicted.

This is the only thing missing however. Save yourselves money and offer clients the higher reward/higher risk option of no hedging - unhedged portfolios will outperform any of the other current Kiwisaver portfolios long term.

The annual fund charges exclude transaction costs incurred by the funds in which the Scheme invests, and any hedging costs.

You're already superior to Smartshares with your international equities/low cost offering. Now you could beat KiwiWealth/Gareth Morgan (who benchmark 50% hedged/50% unhedged of their 85% international equity exposure) by offering 0% hedged.

Even better would be a service that let the client choose level of hedging...