Investment Returns at 31 December 2020

Investment Returns at 31 December 2020

by | 5 Feb, 2021 | Investment

 

Investment returns (before tax and fees) for the quarter ending 31 December 2020 are:

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Returns were solid over the quarter despite the growth in virus cases and renewed lockdown announcements. Equities (shares) in particular posted strong gains with most share markets returning over 10% in the quarter. Investment returns were supported by vaccine approvals, more Government policy stimulus (spending), and clarity on the U.S. election outcome. The strength of our dollar held back gains but our overseas fixed income (bond) funds benefitted from the weak U.S dollar that prevailed. Almost all investments achieved positive returns in the quarter. Whilst it is good that the run of positive returns continues we are concerned, as mentioned here before, that both share and bond prices (in general) are at levels that deem it to be prudent, that is to remain well-diversified and carefully invested. Our active management approach has nevertheless enabled us to find sound investments in most environments.

Your seedlings are growing

Your seedlings are growing

by | 5 Feb, 2021 | General, Investment

Your Christian KiwiSaver Scheme is unique in having direct investment in a pine forest in the southern Hawkes Bay, Hapua Forest.

Just like KiwiSaver, forestry is a long-term investment with a typical forest usually taking some 25 years to mature. Our forestry land value has soared in recent times as investors have come to realise the ability of forestry to provide a carbon offset.

We’ve almost completed harvesting our first crop which was planted as seedlings in 1992-1993 and since 2018 we’ve been steadily replanting our land. So far over 300,000 seedlings have been planted. The next photo shows an area of seedlings planted in 2018.

Replanting in 2020 faced some obstacles with COVID-19 affecting the availability of labour and the Hawkes Bay drought delaying replanting. Some of the forest land is also not suitable for replanting, we don’t plant along the banks of the waterways and there are areas of native bush that we wish to protect and leave to regenerate. See the photo below of an area of retained native bush.

In our October 2019 article, we mentioned that we source our seedlings from Murrays Nurseries Woodville. Seedlings are ready for planting when 25–30 centimetres tall and are mainly planted by hand. It’s labour intensive and done by skilled teams. The number of trees planted per hectare can vary from 600 to 1,400.

Radiata pine was first introduced to New Zealand in the late 1850s to see if it would be a good candidate for widespread planting. Its excellent growth rate prompted seed imports from California in the 1870s, mainly for shelterbelts and woodlots. By the first forestry planting boom in the 1920s and 1930s, it had been adopted as the species of choice.

It proved to be versatile and grew well throughout New Zealand on a variety of soil types, including coastal sands, heavy clays, gravels and volcanic ash deposits.

Logging is a big deal in New Zealand. It is our third largest industry after dairy and meat.

A third of the world’s radiata forests are grown in New Zealand, with Australia and Chile being other major producers. New Zealand now has 1.75 million hectares of planted forest, of which some 90 percent is radiata pine, much in first rotation forests. These forests cover around 7% of New Zealand, which’s about the same area as 10 Stewart Islands. A substantial part of New Zealand (24%) is also covered in indigenous (native) forest.

There are other articles on Hapua Forest in February 2019 and October 2019.

Investing with Christian values

Investing with Christian values

by | 3 Nov, 2020 | Investment

Investing with Christian values

We invest your savings in the Christian KiwiSaver Scheme, and all the other funds we manage, under our Ethical Investment Policy, a policy based on our Christian values. We call it being Ethical at Heart.

We recently looked at what underpins our approach to ethical investing, which might be better termed value-based investing. We started from recognising that economic decisions involve values-based choices and that the Christian tradition recognises that these choices are made in a world marred by human failure and its consequences. And yet we have a God who is active in restoring the world and a church which seeks goodness and the growth of human flourishing.

When applied to the work of Anglican Financial Care, as your fund manager, this means that we recognise the order of New Zealand society, including the legal requirement for the organisation to act in the financial interest of its members. As we do so, we expect that a participation in the economic life of our nation and world informed by Christian ethics will be fruitful, and that investing in those things which God loves will be productive as well as tending towards the restoration of the world.

Some investment opportunities will be so marked by evil or its consequences that we will not invest, even if the potential financial reward is high. However, many other investment opportunities are ethically mixed. For example, concrete has been rightly called “the most destructive material on earth,” but concrete is widely used as a cheap and effective way to build homes desperately needed by the poor. It can be ethically preferable to invest in a concrete producer — if the purpose of the investment is to meet human need. Most forms of investment will involve complicity in a degree of disorder – and therein lies the challenge of values-based investing. Our primary function is to prudently build your nest egg with solid returns whilst keeping to our values.

It is no accident the church’s mission is expressed positively (how we share in the good that God is doing), rather than negatively (how we avoid evil). Our investment activity will similarly express the ways in which we are participating in the good God is doing in the world. Theologically, our bias is towards optimism about the restoration of the world, not withdrawal from the world. We are required to build, produce and multiply. This means we will continue to invest, even though this involves us in the mess of a broken world, because we believe that by wise investment choices we can support what tends towards the good.

Our investment activity, then, will be informed first by a desire to support and encourage what is good. We are not defined primarily by what we reject. Our defining mark of ethical commitment is that we support the signs of God’s restoring work in the world. We will work hard to make wise and ethical investment choices, and to explain clearly why we believe our investment choices support the mission of the church.

How do we actually do this in practice? We start from a list of sectors which we consider are in essence contrary to Christian values. This list includes alcohol, animal welfare, armaments and defence, fossil fuels, gambling, pornography, and tobacco.

We are aware that there are fiduciary implications from screening out all these stocks (shares), so we lift the lid on these sectors to see if there are any stocks within these sectors that could be included. We use some international investment research to help in this respect. We then go through a robust process with our investment committee to justify any inclusion that we think is warranted.

The Christian KiwiSaver Scheme has from its very beginning in 2007 been invested under Anglican Financial Care’s Ethical Investment Policy. As an organisation Anglican Financial Care formalised its commitment to ethical investing in 2002. However, even prior to that we endeavoured to make investment choices that aligned with Christian values, which form the foundation of our organisation. Our Policy is not static just as the world around us is constantly changing.

 

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

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Investment returns at 30 June 2020

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:

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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.

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.

Investment returns at 30 June 2020

Responsible investing

by | 30 Jul, 2020 | Investment

What is responsible investing?

What is responsible investing and is it just another piece of jargon that is difficult to understand and bears no relation to our day to day life? At Christian KiwiSaver Scheme, we believe that responsible investing is an important foundation for choosing the investments that we undertake on behalf of our members.

Looking at it straightforwardly, responsible investing could be compared to shopping for eggs in the supermarket. When you find the eggs on the supermarket shelves, you are confronted by a range of different choices – bio organic eggs, paddock eggs, free-range, caged, cage-free, barn raised, etc. The selection is vast and comes with a range of prices to match your choice. So how do you choose? Would you buy solely on the price going for the cheapest eggs no matter what? Would you prefer organic eggs? Or perhaps you are concerned for the chicken’s welfare and would not select eggs from caged chickens?

On a personal level in the egg scenario, if animal welfare is an ethical concern for you and you respond by choosing free-range eggs, you could be considered to be behaving like a responsible investor.

On a broader level, when you (or your KiwiSaver provider on your behalf) are investing responsibly, you are considering investments which reflect your values and take into account how companies manage their responsibilities, for example in their dealings with the environment or the community.

You may recall either working for or hearing about, companies that were out to maximise their profit no matter the cost. However, over recent years, there has been a move to balance the interests of shareholders with other concerns such as social and environmental welfare.

There has been a big change in our supermarkets with plastic bags being replaced by reusable ones. There had been community concern about the effect that plastic bags were having on the environment due to the sheer numbers going into landfills and turning up in our waterways and oceans. This concern about the impact on our environment influenced the government to put laws in place to reduce the amount of plastic being used.

As a community, we have become interested in a variety of social and environmental issues, and this has translated into broader concerns about where KiwiSaver funds are invested. At Christian KiwiSaver Scheme we seek to avoid investments in products such as tobacco, guns and other arms manufacturing, gambling, and adult entertainment. How companies behave with regard to the environment, their employees and others, and the way they govern themselves are also things we think about when making investment decisions for our members.

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.