Investment returns at 30 June 2020, before fees and tax

Investment returns at 30 June 2020

by | 30 Jul, 2020 | Investment, Reporting

The quarter ending 30 June 2020 saw a welcome bounce back to strong positive returns, following the initial global reaction to the COVID-19 pandemic in March. The positive were primarily influenced by investors around the world regaining confidence as governments delivered sizeable economic stimulus packages (like we have seen from the New Zealand government). The most recent announcement came from the European Union who announced a €750b COVID-19 recovery plan. Further packages are expected to be announced. Aiding the positivity is that several countries have made headway in containing the virus and that the development of a vaccine is well underway with some early trials showing promising results.

In addition to government spending, the positive outlook was also helped by the expectation that interest rates may remain low for years. Investors were prepared to look through some negative headlines (e.g. reported economic statistics and political developments) and instead focus on the potential for better economic activity particularly as several economies planned to re-open. The commonly quoted USA index the Dow Jones was up a staggering 18% in the quarter.

 

While we welcomed the rebound in the quarter, we remain focussed on the long term investment horizon for our members. Through Christian KiwiSaver Scheme’s cautious investment strategy (focussed, diversified and with capital preservation in mind) our members have been shielded from the recent extreme market movements to some degree. Going forward, in the short term at least, we expect that asset prices will remain volatile (i.e. go up and down).

Investment returns at 30 June 2020 (before fees and tax) were as follows:

Fund 3 months 1 Year (p.a.) 3 years (p.a.) 5 years (p.a.) 10 years (p.a.)
Growth Fund 3.2% 5.1% 9.2% 9.6% 8.7%
Balanced Fund 2.6% 4.7% 7.4% 7.9% 7.5%
Income Fund 1.2% 3.7% 4.0% 4.2% 4.5%

Not already a member of Christian KiwiSaver Scheme? Join other like-minded Kiwi Christians growing their savings ethically today!

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Membership of the Christian KiwiSaver Scheme is offered only to:

  • employees of organisations whose primary activities are in our opinion Christian mission or ministry. This includes employees of charitable entities associated with or operating in the Christian Church, or employees of entities which we approve as having a Christian special character; and
  • persons who express a Christian faith and have a commitment to Christian community involvement when applying (and their immediate family members and dependants).

Christian KiwiSaver Scheme is managed and issued by The New Zealand Anglican Church Pension Board (trading as Anglican Financial Care). The Product Disclosure Statement and Fund Updates are available under Documents.

Different KiwiSaver scenarios for different life stages

Different KiwiSaver scenarios for different life stages

by | 30 Jul, 2020 | Investment, KiwiSaver

We have put together a couple of scenarios based on different life stages. First, we look at how a younger investor may view their KiwiSaver investment, followed by someone who is looking at retiring sometime in the next couple of years.

 

Scenario 1: I am in my mid-30s and am in a ‘growth’ fund.

At Christian KiwiSaver Scheme we have three funds members can choose from, and you can select one fund or a combination of all three depending on your risk appetite and goals. For example, if retirement is still some years away, you may consider leaning towards a growth fund.

However, this choice may also be affected by your approach to life. If you tend to grow nervous every time the market changes, your attitude towards ‘risk’ might not suit a growth fund. Growth funds can be described as higher risk but with the potential for higher returns.

You should also factor in your own personal circumstances. A lot of people choose to be in a growth fund to maximise the time their investment has to perform before they retire. However if you think you may need to make a first home withdrawal in the next couple of years, it may pay to look at a mix of funds that give you a more conservative investment profile to minimise the impact of any significant market movements in the short term.

It is important to be aware that if you switch funds while the markets are down, you will likely lock in any losses you’ve already seen. What does this mean in simple terms? If the market bounces back, you may not see the benefit from that bounce back to the same extent you would if you had not switched funds.

Prior to COVID-19, a lot of KiwiSaver providers had seen a sustained period of good returns. While you may have seen a drop in returns at the start of the COVID-19 pandemic, we have since seen the market rebound strongly from the lows that were seen. History tells us that markets tend to recover, though they may undergo change and not look the same as they once did.

We recommend that you take a look at the ‘Investor Kickstater’ calculator on sorted.org.nz, which will help you better determine what fund you might want to be in. It will ask a couple of simple questions around what life stage you are in, your income, your debt and your security etc.

Remember that there is no one answer for everyone, but if you are able to understand your risk appetite better, you are more likely to be able to find the right fund to suit you.

Scenario 2: I am nearing retirement and my KiwiSaver is currently split into different funds

A different view would be given for someone who is approaching retirement compared with someone in their mid-30s; however, it’s still important to review your appetite for risk. If you are in a growth fund and you will think you will need the money within the next few years there may be insufficient time for your investment to recover from a market decline.

If you do not need access to your KiwiSaver balance immediately at age 65, and you have a higher appetite towards investment risk, you may want at least some of your money invested in more risky assets classes such as shares.

Note that you can choose to have regular payments from your KiwiSaver account paid to you after age 65 at regular intervals. This means that the money you don’t need access to immediately can continue to benefit from being invested. If this is something you would like to look into, you can contact our team for further information on how this can work for you.

There isn’t one scenario for everyone. Therefore we recommend that you take a look at the ‘Retirement Planning’ tool on sorted.org.nz to work through how much you want to aim to have to live on throughout your retirement years. This will help give you an idea of your projected balance based on your circumstances.

If you are currently approaching the age at which you wish to retire, you may want to seek advice from a financial advisor if you have access to one. Your KiwiSaver balance could be one piece of your retirement equation, and you will want to make sure that all parts align for a happy retirement.

Not already a member of Christian KiwiSaver Scheme? Join other like-minded Kiwi Christians growing their savings ethically today!

Join Now

Membership of the Christian KiwiSaver Scheme is offered only to:

  • employees of organisations whose primary activities are in our opinion Christian mission or ministry. This includes employees of charitable entities associated with or operating in the Christian Church, or employees of entities which we approve as having a Christian special character; and
  • persons who express a Christian faith and have a commitment to Christian community involvement when applying (and their immediate family members and dependants).

Christian KiwiSaver Scheme is managed and issued by The New Zealand Anglican Church Pension Board (trading as Anglican Financial Care). The Product Disclosure Statement and Fund Updates are available under Documents.

Investing in your child’s future

Investing in your child’s future

by | 30 Jul, 2020 | General, KiwiSaver

For many of us, lockdown gave us a chance to pause and reassess what’s important and what we value in our lives – such as family time or financial security.

You often will hear financial experts recommending putting away enough money to cover at least three months’ worth of expenses for a ‘rainy day’. This can be a big ask for many of us, but the pandemic has shown to us how important it is to have a buffer set aside if we do encounter tough times.

We often say, it’s never too late to start saving – not just for ourselves, but for our children and grandchildren too.

Day-to-day, we often find ourselves running around chasing a busy schedule under the pressures of everyday life. Before you know it, your children will be almost grown-up. As adults, we know that this brings with it more responsibility, including more significant expenses.

You might find yourself wanting to help them out as they navigate the challenges of adulthood such as buying a car, becoming a parent, getting an education or getting into their first home. The recent financial shock to the economy may have caused you to think about how you can help set up good saving habits for your children.

Suppose you have found yourself with some additional savings after spending less than usual during lockdown. Now might be the time to start thinking about how you can give your children’s savings a kick start. One of the options could be a KiwiSaver account.

 

How may KiwiSaver be able to help children?

A first step in setting good long term saving habits is to set your children up with a KiwiSaver account. This may be one part of the plan as you look to set your child up for the road ahead. They may not see the value of it now but, however in the future, it will likely benefit them. At Christian KiwiSaver Scheme we don’t charge any fees for under 18s.

According to IRD, as of June 2019, around 300,000 children under 18 were enrolled in KiwiSaver.

KiwiSaver can be a great start for children when they look at buying a first home. They can use some of their KiwiSaver balance towards a deposit. We have seen in the media over recent years how some First Home Buyers have found it difficult to get on the property ladder. Starting to save early could help alleviate some of the pressure down the track.

Opening a KiwiSaver account in most cases is more accessible to parents than looking at other types of managed funds. With no fees for under 18s at Christian KiwiSaver Scheme and no minimum regular contributions needed for your children’s accounts (unless the child has chosen to contribute if they are employed), you or your child can contribute as much or as little to the account as you want – it’s on your terms.

Joining KiwiSaver young ensures your child will have a head start in saving for their long term future.

If you want to enrol a child with Christian KiwiSaver Scheme, you can do this by filling out an application form at the back of our Product Disclosure Statement and sending it to PO Box 12-287, Thorndon, Wellington 6144.

 

Not already a member of Christian KiwiSaver Scheme? Join other like-minded Kiwi Christians growing their savings ethically today!

Join Now

Membership of the Christian KiwiSaver Scheme is offered only to:

  • employees of organisations whose primary activities are in our opinion Christian mission or ministry. This includes employees of charitable entities associated with or operating in the Christian Church, or employees of entities which we approve as having a Christian special character; and
  • persons who express a Christian faith and have a commitment to Christian community involvement when applying (and their immediate family members and dependants).

Christian KiwiSaver Scheme is managed and issued by The New Zealand Anglican Church Pension Board (trading as Anglican Financial Care). The Product Disclosure Statement and Fund Updates are available under Documents.