The fog sur­round­ing your Ki­wiSaver

De­spite con­tro­ver­sies over hold­ings in weapons, ob­tain­ing in­vest­ment in­for­ma­tion is now harder, writes

The Southland Times - - BUSINESS -

Sim­plic­ity Ki­wiSaver is near­ing com­ple­tion of its ‘‘Where in the World’’ project. It’s build­ing an on­line world map, where in­vestors can zero in on where their money has been in­vested.

‘‘They will click on a coun­try, and it will tell them the stocks their money has been in­vested in,’’ says Sim­plic­ity founder Sam Stubbs.

Ar­guably only Kiwi Wealth is more trans­par­ent.

When its savers log on to Kiwi Wealth’s web­site, they can see a list of ev­ery stock their fund is in­vested in, in­clud­ing the pro­por­tion of their money that is in each.

‘‘Trans­parency has al­ways been a key prin­ci­ple for Kiwi Wealth right back to the days of Gareth Mor­gan,’’ says Kiwi Wealth’s Ramesh Naran.

When Ki­wiSavers know where money is in­vested, they can start tak­ing an in­ter­est, and play­ing their part in keep­ing their fund man­agers hon­est, and eth­i­cal.

It also opens their eyes to the gi­ant New Zealand com­pa­nies they are ex­posed to.

Ki­wiSaver has been billed as a means of lift­ing New Zealan­ders’ in­vest­ment knowl­edge and skills.

But for that to work, Ki­wiSavers have to get in­ter­ested in where their money is in­vested, in­clud­ing the New Zealand com­pa­nies listed in the NZX.

The share­mar­ket an­nual share­holder meet­ing sea­son is draw­ing to an end.

In­vestors use these meet­ings to quiz com­pany chief ex­ec­u­tive and boards about their performance, and in some cases to protest, for ex­am­ple at Spark’s re­cent share­holder meet­ing in Auck­land, where di­rec­tors asked for, and got, a large pay rise.

It’s ac­tu­ally be­come more dif­fi­cult, not eas­ier, to find out how your Ki­wiSaver is in­vested.

Once, all the Ki­wiSaver man­agers were re­quired by law to post on their web­sites a com­plete list of the shares and bonds they were in­vested in.

It was these an­nual lists, show­ing the shares and bonds held, and the pro­por­tion of peo­ple’s money in­vested in them, which led to the first ar­ti­cles re­veal­ing many were in­vested in com­pa­nies in­volved in controversial weapons like land mines and clus­ter bombs, as well as nu­clear weapons.

None of this in­for­ma­tion is now on the big Ki­wiSaver providers’ web­sites.

The in­for­ma­tion has mi­grated onto the on­line Dis­close Reg­is­ter run by the Com­pa­nies Of­fice.

Even though it is free to search the Dis­close reg­is­ter, it is uni­ver­sally ac­knowl­edged to be dis­tinctly user-un­friendly.

But a search under ‘‘Of­fers’’ with the name of your Ki­wiSaver scheme, fol­lowed by click­ing on the ‘‘In­vest­ment Op­tions’’ tab, fol­lowed by click­ing on ‘‘Full Port­fo­lio Hold­ings’’ will bring up your fund’s full hold­ings list.

Growth in­vestors

In­vestors in these funds have the largest part of their money in vo­latile shares, hop­ing that over time they will get a high re­turn, even if they have to put up with a few bumps along the way.

The ASB Growth fund pro­vides a guide to the kind of ex­po­sures growth funds have in the large New Zealand com­pa­nies, though some Ki­wiSaver schemes such as Kiwi Wealth make a virtue of in­vest­ing more of your money off­shore, in part as a way of di­ver­si­fy­ing Ki­wiSavers’ fi­nan­cial risk away from these tiny, shaky is­lands.

For ev­ery $100 in­vested, ASB Growth fund had $1.97 in Fisher & Paykel Health­care.

It had $1.81 in Spark, $1.61 in Auck­land In­ter­na­tional Air­port, $1.51 in Fletcher Build­ing, and $1.29 in A2 Milk.

Other shares in which the fund had more than $1 in ev­ery $100 in­vested were re­tire­ment vil­lage developer and op­er­a­tor Ry­man Health­care, Con­tact Energy, and West­pac, though strictly speak­ing that is now an Aus­tralian com­pany listed on the ASX.

Be­cause of Ki­wiSaver’s lo­cal fo­cus, gi­ant in­ter­na­tional com­pa­nies are a smaller por­tion of the port­fo­lio than com­par­a­tively tiny Kiwi com­pa­nies.

The first in­ter­na­tional share listed is Ap­ple, at 75 cents per $100 in­vested. That was 1 cent be­hind Xero, in which 76 cents per $100 was in­vested.

Balanced in­vestors

In­vestors in these funds have a lower pro­por­tion of their money in shares, but in­di­vid­ual in­vest­ments in Kiwi com­pa­nies can still be large.

West­pac’s Ki­wiSaver balanced fund, for ex­am­ple, had $1.69 in Fisher & Paykel Health­care for ev­ery $100 in­vested.

Other large hold­ings were: Auck­land In­ter­na­tional Air­port ($1.34), Auck­land-fo­cused com­mer­cial prop­erty in­vestor Kiwi Prop­erty Group ($1.23), Spark ($1.05), Con­tact Energy ($1.03) and Fletcher Build­ing ($1.03).

De­fault in­vestors

Ki­wiSavers who can­not de­cide where to put their money are bumped into a de­fault fund.

These are con­ser­va­tive funds with a lot of money in cash and bonds. They are safe, but un­likely to pro­duce high re­turns over an in­vest­ing life­time.

Their largest hold­ings are bonds and cash de­posits.

Just 7.02 per cent of AMP’s de­fault money was in Aus­tralasian shares, in­clud­ing New Zealand shares.

Bond and de­posit in­vestors care less about share prices than their money be­ing se­cure, and their in­ter­est get­ting paid on time.

For ev­ery $100 in­vested at the end of Septem­ber, $16.28 was de­posited with West­pac, its largest po­si­tion.

In­vestors pay Ki­wiSaver man­agers to look af­ter their money.

That saves them hav­ing to worry about it them­selves, other than mak­ing the three key de­ci­sions ev­ery Ki­wiSaver must make: How much they need to be sav­ing from their salary, what kind of fund they should be sav­ing into (con­ser­va­tive, balanced, growth, etc), and which Ki­wiSaver provider they choose to be with.

This is some­times dubbed ‘‘sec­ond­hand cap­i­tal­ism’’, where in­vestors’ money ends up be­ing sunk into com­pa­nies in­di­vid­ual Ki­wiSavers don’t ap­prove of.

In­di­vid­ual in­vestors also have no voice.

Their fund man­ager is the one to de­cide how it will vote the shares their Ki­wiSaver funds hold, if they vote them at all.

Spark di­rec­tors, for ex­am­ple, got their 8.7 per cent pay rise thanks to sup­port from ‘‘in­sti­tu­tional’’ share­hold­ers, in­clud­ing Ki­wiSaver man­agers.

PHOTO: 123RF

Some Ki­wiSaver providers are mak­ing an ef­fort to clear the mist around in­vest­ments.

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