Buying into avocados
If your money is earning a high interest rate, it is often because you cannot get hold of it quickly.
That does not bother Snells Beach resident Noelene Quedey, who has a handful of investments in primary sector investor Myfarm, which enables people to hold a stake in an enterprise without being a sole owner.
‘‘I’ve never done that [sell Myfarm shares] because I don’t want to do that while I’m getting a good return. I haven’t needed to.’’
Since 2016 Quedey has invested in two vineyards, two apple orchards, a kiwifruit orchard and an avocado orchard. She likes the fact she is investing in something tangible.
Myfarm chief executive Andrew Watters said that in the same week the Reserve Bank was making its decision to cut the official cash rate to a record low 1 per cent, an $8.2 million offer to invest in two Sungold kiwifruit orchards was taken up by 60 investors within three days.
The Bay of Plenty kiwifruit offer was expected to generate average annual returns of 9 per cent over the next five years.
Such investments are not for everyone. For a start you usually need a minimum of $100,000 (though that was halved to $50,000 on the kiwifruit properties).
You also have to be a wholesale investor with experience of investing in the sharemarket.
People wanting to get their money out are able to do so on the secondary Syndex sharemarket. Each investment has three shareholders who are directors.
‘‘There’s a distribution each month ... In some of them you also get a percentage of profit as well,’’ Quedey said.
The lowest return she has received was 6.7 per cent.
The projected returns vary for different investments.
For example, a kiwifruit one in Tauranga predicted annual returns of 10 per cent for the first five years, while hop returns were more modest.
Myfarm head of investment research Con Williams said most of the investments were performing well.
‘‘Many are long-term in nature and there will be some inevitable ups and downs, but hopefully investors in the syndicates come out of the right side of these in the long term,’’ he said.
As a percentage of annual returns, management fees are between 0.4 per cent and 0.5 per cent of total employed capital.