An article on Stuff this week highlighted the strong performance of Milford and Generate KiwiSaver funds over the longer term, as reported in the June 2023 quarter Morningstar KiwiSaver survey. Morningstar is an international financial services firm which conducts investment research, including their quarterly KiwiSaver survey.
The Stuff article notes that Milford has been a top performer in the 10-year category for years and “Now we have a new entrant in the top 10 in Generate”.
At Invest Link, we acknowledge that past performance is not necessarily an indicator of future performance. However, it does help you get a sense of your fund manager’s capabilities, when considered alongside their investment strategy.
The key take-out from the article is that it is important that clients are invested in a fund that is suitable for their timeframe and their risk profile. The article provides the example of someone who starts in KiwiSaver at 25, working full-time earning $60,000 a year and contributing 3% of their income, matched by contributions from their employer. It reports that they “could expect to have about $192,500 at retirement if they were in a conservative fund the whole time”. However, “If they switched to growth, they could end up with almost $300,000.” That is a difference of over $100,000.
The example highlights the importance of investing in a fund that is appropriate for your timeframe, which should be considered alongside the fluctuations in the value of your KiwiSaver that you are willing to accept. It is also important that you understand your manager’s investment approach and capabilities. This can help you weather the ups-and-downs which come with investing in the various asset classes.
This is where a good financial adviser can help, ensuring clients are in an appropriate fund and understand what they are invested in, as well as providing oversight of the fund manager’s performance. Through the KiwiSaver funds we manage, Invest Link financial advisers are also there to provide advice and answer questions as clients timeframe and circumstances change.
The article is available at: https://www.stuff.co.nz/business/money/300946615/whats-the-best-performing-kiwisaver-scheme
Contact john@kapitiadvice.co.nz if you would like to discuss KiwiSaver or investment.