by Editor | 3 Feb, 2020 | Investment
The question on every investors mind is – what will returns be like in the future?
As the future is unknown all that one can do is try and prepare for it. And maybe learn from the past. Throughout history investors were concerned with the ‘topic’ of the time. No doubt some ‘topics’ had a major influence on short term returns at that time.
However long term returns have almost always been good. And whilst ‘topics /events’ will always happen one needs to remember that the influence from those events will eventually pass. Exactly how much the influence will be and for how long depends on the event.
With that in mind – What is troubling investors? What are those ‘topics’ now? As always, and depending on who you talk to, the list could be long. From our perspective that list could include (and in no particular order) international trade developments, unrest in the Middle East, politics, cyber-attacks, China and climate change etc. Some of these concerns may always be on the list. Combined with what are considered elevated asset prices at the moment (both shares and bonds) we, like many others, would not be surprised if future returns (short term, and at some point) are not as high as recent gains.
One should remember that sometimes the ‘event’ could be very beneficial to returns too.
That said – What can we can we do about it? No one can predict how any of these events will impact markets in the short term however markets tend to grind higher in the long term as the economy progresses. Short-term events and market movements are outside an investors’ control.
It is more important for investors to focus on what is in their control. An appropriate savings plan is an important part of that mix. Any savings should also be diversified (across different shares and bonds, and geographically) and in quality investments (as per in all our funds).
by Editor | 3 Feb, 2020 | Investment
Managing an ethical investment portfolio requires constant care, awareness and analysis. A sector that has particular significance currently is energy. We strongly believe in a lower carbon future and that society needs to transition away from fossil fuels as quickly as possible, but reflecting this belief in our investment strategy requires a balanced and considered approach.
Our Chief Executive, Mark Wilcox, outlines our thinking around fossil fuels:
Anglican Financial Care (who manages the Christian KiwiSaver Scheme) has a policy on fossil fuels but this does not extend to full divestment.
First and foremost, we stand by biblical principles which infer creation is to be cared for and protected for future generations. In our opinion, the 2015 Paris Agreement targets infer risks to companies within the energy sector who don’t appropriately adapt their business models. We have elected to respond by excluding exposure to coal and tar sands companies and to rank other energy companies according to their extent of contribution towards a lower-carbon world.
We recognise that fossil fuel divestment is a matter of importance to the Church and that some of us share a sense of frustration with the lack of progress towards the Paris Agreement targets. However, while the future is renewables and green technology, and progress has been made, fossil fuels will still be the planet’s dominant fuel source for a long time yet (likely at least until 2050). Accordingly, there would be considerable financial risk to our members in taking a full divestment approach at this stage.
In recognition that part of the solution lies with alternative energy solutions, we have made a significant investment in a global alternative energy fund. We also have a long-standing forestry investment. We recently sold the cutting rights to the trees but has retained full ownership of the land and is currently re-planting.
For a more detailed analysis on investing towards a renewable and green technology future, we recommend this Wells Fargo white paper: It’s Not Easy Being Green—The Future of Fossil Fuels:
The bottom line is that our lives revolve around energy use, and lots of it. Fossil fuels generate most of that energy today. Recent progress in renewables and green technology has been made, and it is the future. The green movement has investors believing that fossil fuel use will soon die. We are doubtful. It takes energy to create energy, and green technologies often require fossil fuel use too. Additionally, emerging market energy use continues to climb higher. By 2050, the planet’s dominant fuel source will still likely be fossil fuels. For the planet’s sake, let’s hope that green progress has a higher gear still.
If you would like to check for yourself how Christian KiwiSaver Scheme investments mitigate the impact of climate change or to see – as ethical investors – what we do invest in, visit our website or call us on (0508) 738 473.
by Editor | 3 Feb, 2020 | General, KiwiSaver
When it comes to ordering a pizza, there are so many different outlets we can use, and, even then, there are so many different flavours to suit our tastes – from meaty, seafood, vegetarian to vegan pizza. There’s even a range of crusts we can choose between, from thin to crusty to pan fried. For the more health conscious among us there’s now available four-star nutritional pizzas.
You know, choosing the right KiwiSaver provider and scheme for you can be like choosing the type of pizza we want. There are so many providers out there, and even when we may have found a provider we like there’s a range of funds between conservative, balanced, growth or aggressive and it can be confusing.
Now, like choosing that nutritious pizza, there’s a range of ethical – or socially responsible – KiwiSaver schemes and providers in the market. This can make it difficult to choose something that matches what we’re looking for. While in selecting a pizza it will depend on what flavour or taste we’re looking for, in choosing a KiwiSaver scheme that’s right for us it’s down to our individual values and beliefs.
Values are very abstract concepts aren’t they? But basically they’re our preferences and priorities. We only really know that values are in our lives when we’re living in line with them. Unlike that pizza in the picture, values are so intangible; we can’t touch them. It could be said that our values are ideas that enable us to prioritise all our experiences.
Our beliefs influence and create our values. The Christian KiwiSaver Scheme is based on universally accepted Christian values, and our investment team apply those values to where funds are invested.
Just like in choosing the type of pizza you eat – whether you want a vegetarian or even vegan pizza the key to avoiding any value conflicts is to be really clear about your priorities and align these with all aspects of your life – from your choice of pizza to including in your KiwiSaver provider or fund the type of companies you would want to invest in.
When next you order a pizza think about how you choose the toppings and base, see if it lines up with your values. If you would like to talk with us about our ethical investment options check us out at Anglican Financial Care’s Christian KiwiSaver Scheme website. Or, if you prefer, give us a call on (0508) 738 473.
by Editor | 3 Feb, 2020 | KiwiSaver
There’s a lot of jargon used by the media and others when it comes to KiwiSaver and we started explaining some of this in our October 2019 issue. We try to use plain English but every now and again a bit of jargon is inevitable in our communications with you. Please tell us if there is something you’d like us to explain. This explanation covers the various roles involved with the governance and running a KiwiSaver scheme.
Trustee can be individuals or an organisation, and they hold all contributions and investments in trust. As the Christian KiwiSaver Scheme is a restricted scheme, the Trustee by law is the Manager.
Manager this is your KiwiSaver scheme provider, e.g. Anglican Financial Care, and is the organisation responsible for managing the scheme.
Issuer generally means the Manager of the particular KiwiSaver scheme. For the Christian KiwiSaver Scheme this means Anglican Financial Care.
Administrator, sometimes called the Administration Manager, is the organisation appointed by the Manager to handle the day to day workings of the scheme, e.g. updating your account details, your account balance and paying withdrawals. For Christian KiwiSaver Scheme this means Anglican Financial Care.
Investment manager, sometimes called Fund Manager, this is a person or organisation appointed by the Manager to look after all or some of the KiwiSaver scheme’s investments. Anglican Financial Care undertakes the investment activities for Christian KiwiSaver Scheme.
Custodian and Supervisor are other terms you might hear. The Christian KiwiSaver Scheme is a restricted KiwiSaver scheme (explained in the October 2019 issue) and therefore does not need to appoint people/organisations to these positions.
The Financial Markets Authority which is also referred to by its initials FMA, is the Government agency responsible for enforcing securities, financial reporting and company law as they apply to financial services and securities markets. They also regulate securities exchanges, financial advisers and brokers, auditors, trustees and issuers – including issuers of KiwiSaver and superannuation schemes. As the Manager and Issuer of the Christian KiwiSaver Scheme Anglican Financial Care is required to file a variety of reports to the FMA.
There is a KiwiSaver Glossary on the website under Documents/Guides & Policies that explains most of the KiwiSaver related jargon.
by Editor | 5 Dec, 2019 | General
It is a pleasure to send you Christmas greetings on behalf of the Board of Anglican Financial Care, as we approach this holy season, and await the longed-for birth of Christ. In our celebrations we give thanks that God is continually reaching out to us, longing to be born in us, longing for us to be in God’s company and drawn into the divine life of God. This is why Christmas is a special time. It means tasting something of heaven on earth as Love comes to surround us and indwell us.
Christmas tells us that all human life is profoundly sacred, so much so that God comes to us in human form to speak to us on our level and in our language. In this festival God is telling us and showing us that human beings in their fragility and humility can be full of God; very holy, very precious. In the message of the birth of Christ about which the angels sing and shepherds rush to adore, we see that all life is held in God and surrounded by God, and that God can reach out to us at any time and in any place, especially to the places engulfed in the darkness of suffering and pain.
Given the events of the last year and the moral issues currently being debated in our Parliament at present, this message is needed in our world more than ever. That someone could be so filled with hate that it was possible to destroy so many lives in the Mosque shootings last March is unfathomable. Every Christmas we celebrate God becoming fully human, thus making our humanity holy. If we are to take this message to heart, and open our own hearts to the indwelling of God, then we need to embrace those who appear to be ‘other’, to overcome our fear of those who are different, learn to move beyond tolerance of others to being in relationship, and to celebrate our common humanity.
For when the heavens are opened on that first Christmas night, what is disclosed? God. God revealed in the flesh; God, full of grace and truth. We see the fragility and vulnerability of human existence in the new-born baby. When we look toward that holy Child, we see only Love; Love that is offered freely, that is not manipulative, controlling, fearful, or violent. It is Love that is simply present, that we can choose to receive and to adore, or not. It is Love that has come to win us over, to draw us to God. It is the same Love that moves the stars and stirs our hearts. It is a Love that invites our total allegiance. This Love also helps us see our humanity from a fresh angle; it is fragile, dependent, but more holy than we could ever have imagined. It tells us that our own very being comes from the heart of God and is the result of the creative outpouring of Love who looks upon all that has been made and pronounced it to be very good.
“Come, Holy One, come, my Redeemer; come Lord Jesus, and be born in me, live in me, grown in me, until my life is transformed by your life and I seek only to know your love and make your love known. Amen.”*
May you and yours have a holy and blessed Christmas and a happy New Year.
Dean Lawrence Kimberley
Chairperson
*Christopher L. Webber Ed., Advent with Evelyn Underhill, Morehouse Publishing, Harrisburg-New York, 2006.
by Editor | 29 Oct, 2019 | Investment
The quarter had another positive performance with both shares and bonds (fixed interest securities) performing strongly in the quarter. Longer term returns are also positive with growth assets (with their higher weighting toward shares) outperforming the more conservative income assets (and their weighting toward bonds). The positive returns continued despite the many uncertainties in the quarter e.g. ongoing US and China trade tensions, talk of US presidential impeachment, Hong Kong riots, Brexit developments and the attack on Saudi oil production.
No doubt some of this uncertainty weighed on investor minds and led to a softening in the growth outlook. Central Banks (Government owned banks but independent) indicated further easing (i.e. lower interest rates), trying to offset the reduced growth outlook.
Despite the many uncertainties the funds continue to achieve good gains. Whilst investor sentiment could affect short term returns we continue to invest (cautiously) focussing on long term performance.
Investment returns at 30 September 2019, before fees and tax:
| | | | |
|---|
| | | | |
| Fund | 3 months | 1 Year (p.a.) | 3 years (p.a.) | 5 years (p.a.) |
| Growth Fund | -9.50% | 0.20% | 6.00% | 7.00% |
| | | | |
| Balanced Fund | -6.50% | 1.50% | 5.30% | 6.10% |
| | | | |
| Income Fund | -0.80% | 2.80% | 3.40% | 3.70% |
