Default Kiwisaver vs Kiwisaver Specialist

Transcript

1. Kiwisaver Property Investment Consultant Registered Financial Adviser leo@propertyacademy.net Property Academy – New Zealand facebook.com/propertyacademynz 23A Queens Rd, Panmure, Auckland Leo Shin Presentation by 1
2. Has your Kiwisaver suffered any losses due to COVID-19? “Morningstar has released new data showing that on average, KiwiSaver Conservative Funds were down 2.98% in March, Balanced down 8%, Growth down 10.56% and Aggressive down 11.9%. ” - Stuff.co.nz “ Is there a way to minimalize or avoid losing more? ” 2
3. 1. Own contributions (3-10% of your income) 2. Employer contributions 3. Government Contributions (50% of your contributions capping at $521.00) 4. Most importantly, your Kiwisaver provider’s performance or their ability to invest and grow your Kiwisaver. Four factors that increase your Kiwisaver Kiwisaver is a government-regulated investment fund. The amount on your Kiwisaver Balance represents the value of your investment, which is largely affected by your choice of Kiwisaver provider. 3
4. Default Providers (ie banks) v.s Kiwisaver Specialists  Main products are Mortgages, Personal Loans, Credit Cards, Insurance etc  Kiwisaver is an add-on  Passive Investing Strategies generally have poor–average % returns compared to their peers  Only focus is to ensure maximum returns to their investors  Actively monitor the performance of your carefully selected investments Kiwisaver Specialists (Active Investors) Default Providers / banks (Passive Investors) 4
5. Default Providers (ie banks) v.s Kiwisaver Specialists  Main products are Mortgages, Personal Loans, Credit Cards, Insurance etc  Kiwisaver is an add-on  Passive Investing Strategies generally have poor–average % returns compared to their peers  Only focus is to ensure maximum returns to their investors  Actively monitor the performance of your carefully selected investments Kiwisaver Specialists (Active Investors) Default Providers / banks (Passive Investors) 5 Think of it like looking for the BEST ice-cream…
6. Default Providers (ie banks) v.s Kiwisaver Specialists  Main products are Mortgages, Personal Loans, Credit Cards, Insurance etc  Kiwisaver is an add-on  Passive Investing Strategies generally have poor–average % returns compared to their peers  Only focus is to ensure maximum returns to their investors  Actively monitor the performance of your carefully selected investments Kiwisaver Specialists (Active Investors) Default Providers / banks (Passive Investors) 6 Think of it like looking for the BEST ice-cream… Would you go to Maccas?
7.  Main products are Mortgages, Personal Loans, Credit Cards, Insurance etc  Kiwisaver is an add-on  Passive Investing Strategies generally have poor–average % returns compared to their peers Default Providers (ie banks) v.s Kiwisaver Specialists  Only focus is to ensure maximum returns to their investors  Actively monitor the performance of your carefully selected investments Kiwisaver Specialists (Active Investors) Default Providers / banks (Passive Investors) 7 Or would you go to an ice-cream specialist? It’s the same concept Think of it like looking for the BEST ice-cream… Would you go to Maccas?
8. “ So how is my Kiwisaver Provider performing? ” “ Am I investing in the right Kiwisaver Fund? ” Let’s take a look... 8
9. https://www.morningstar.com/ 9 Morningstar has provided historical research reports of Kiwisaver Fund performances in NZ and they’ve compared how all the different providers performed
10. https://cdn.morningstar.com.a u/mca/s/documents/KiwiSaver- Survey-Q2-2019-Revised.pdf https://www.morningsta r.com.au/Funds/KiwiSav erReports ALL Quarterly Morningstar Kiwisaver Reports from December 2012 – December 2019 HERE https://cdn.morningstar.com.a u/mca/s/documents/KiwiSaver -Survey-Q3-2019-revised.pdf https://cdn.morningstar.com.a u/mca/s/documents/KiwiSaver _Survey_Q4_2019.pdf https://cdn.morningstar.com. au/mca/s/documents/KiwiSav er_Survey_Q4_2019.pdf June Quarter 2019 September Quarter 2019 December Quarter 2019 March Quarter 2020 (All figures are after fees and before tax) 10
11. 11 If you haven’t switched providers before, chances are you’re on a default fund, which are generally conservative or defensive, resulting in low, low returns How is your Kiwisaver fund performing…?
15. https://www.generatewealth.co.nz/ 15 Here’s a Kiwisaver Specialist called Generate, which is where I think everyone should be on… They’re NZ owned and operated and they’ve consistently shown market beating results…
16. https://www.generatewealth.co.nz/about-us/why-generate 16
17. 17 See how Generate’s Conservative Fund is performing
21. Fund Types: Conservative v.s Balanced v.s Growth? Aggressive funds - Volatility is likely to be highest of the funds - Also suitable if you are intending to leave your money in KiwiSaver for at least 10+ years and don’t mind drops along the way Conservative funds - Volatility is likely to be the lowest - Suitable if you expect to spend your KiwiSaver within the next 1-5 years Balanced funds - Volatility is likely to be higher than Conservative funds but lower than Growth funds - Suitable if you expect to spend your KiwiSaver within the next 5-10 years Growth funds - Volatility is likely to be higher than Balanced funds but lower than Aggressive funds - Suitable if you intend to spend your KiwiSaver after 10 years The longer you have until you withdraw, the more growth assets you should hold to maximise your Kiwisaver’s potential. But, if you are planning to buy your first home or nearing retirement in the next five years, you should consider the Conservative Fund. Risk + Growth Defensive < Fund Type > Aggressive 21
22. ANZ ASB Kiwiwealth Westpac NEXT 21 22 BNZ
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28. The MILLION DOLLAR question: “ How much could I really be missing out on by keeping my Kiwisaver with my bank or a Default Provider Rather than investing in a Kiwisaver Specialist like Generate ? ” 28
29. Calculator HERE 29 Industry Average Default / Defensive Fund These are the differences this 20 year old could get upon retirement if he switches to Generate, compared to an average default fund, assuming he’ll continue to save until 65.
30. 30 …whereas the difference is much smaller for the 40 year old (if he contributes and has the same amount as the 20 year old) This is the power of COMPOUND INTEREST The sooner, the better. Make the switch, it’s FREE
31. 31 Sit tight and don’t be tempted to move into a more defensive fund type, (ie, Growth > Conservative) as you’ll be crystalizing your loss. Which wave are you going to ride on the way back up? S&P 500 Index Fund Historical Graph Great Recession (2008) Many of us have suffered a drop in our Kiwisaver due to COVID-19, like the financial crisis in 2007-2008
32. How to join or transfer https://www.generatewealth.co.nz/join/kiwisaver?advisor=PLG03 (1) Click the link below to sign up (2) Generate will take care of everything else and they’ll email you a welcome note and login details to access your account online 32 Property Investment Consultant Registered Financial Adviser leo@propertyacademy.net Property Academy – New Zealand facebook.com/propertyacademynz 23A Queens Rd, Panmure, Auckland Leo Shin Presentation by