Smart pick favours cash

TWO million New Zealanders are now in KiwiSaver. As part of the effort to build awareness about how your retirement savings are invested, Your Money profiles one KiwiSaver scheme a week. Provider: Smartshares (owned by sharemarket operator NZX). Scheme: Smartkiwi Conservative Fund. Overview: Unlike most KiwiSaver managers, Smartshares offers passive index tracking funds, known as exchange traded funds. This means its share investments automatically track stock indices rather than managers actively trying to pick winners, the idea being that fees will be lower and returns will match the market as a whole.

The fund has about an 80/20 mix between equity investments (shares) and fixed-interest investments such as bonds and listed debt securities. The 20 per cent in shares is invested in smartFONZ, a listed index fund which invests in the top 50 New Zealand listed companies. As at March 31, 76 per cent of the money was in cash, with no money invested in bonds or elsewhere. A typical conservative fund would usually have about half of the money in bonds.

The equities portion of the fund was also less diversified than most, with 23 per cent of the money in Australasian equities.. Fund size: $2.81m as at June 30. Total return over 1 year*: 8.18 per cent as at June 30 versus an average for KiwiSaver diversified conservative funds of 7.45 per cent. Total return over 3 years*: 5.75 per cent per annum versus an average for KiwiSaver diversified conservative funds of 6.21 per cent. Unit price: 1.24 at June 30. Fees: 0.85 per cent of fund balance a year for balances between $4500 and $29,999. * After fees but before tax

KiwiSaver Spotlight is written by Eloise Gibson using information from FundSource and the KiwiSaver provider. The information is considered general in nature. Consult a professional adviser before making any investment decisions.