Investment | Christian Kiwisaver Scheme

What type of investor are you?

by Amit | 31 Jan, 2019 | Investment, KiwiSaver, Life after 65, Membership

Being in the investment fund that best suits you is very important. Not knowing can cost you money if you make decisions that are a reaction to investment markets (e.g. a negative return) rather than a change in your personal circumstances or your feelings about risk.

Changes in the investment markets don’t change your investor type, changes in your personal circumstances are what influences your investor type.

You can also have more than one investor type (this can also be called your ‘investor profile’) depending on your personal investment goals. Confused? The Sorted website has some good information on it to explain how you can work this out and decide which type of Fund may best suit you. You can sign up on the Sorted site and save your personalised findings.

Sorted also has a personality quiz where you can find out if you’re a money maestro, practical domestic, authentic dreamer, money mechanic or one of the 12 other types.

Keep in mind that your investor type is not a description of you (people who are adrenaline junkies can be conservative where their money is concerned!). Your investor type is a measure of your financial circumstances, your personality, the timeframe you have to invest, and most importantly, how much risk you feel comfortable taking or can afford to take. The higher the returns you chase, the more you need to accept risk and run the chance that your investments will fluctuate in value or lose value.

Sorted has suggested the following attributes for various investor types.

We offer three distinct investment funds within the Christian KiwiSaver Scheme – the Income Fund, Balanced Fund and Growth Fund. This gives our members access to a good range of investment options, according to their particular circumstances. Members can invest in more than one of these Funds. This means each member can fashion an investment selection that suits the type of investor they are, and it can be changed at any time in the future.

Changes in the investment markets don’t change your investor type, changes in your personal circumstance are what influences your investor profile/type.

Investment returns to 30 September 2018

by Editor | 4 Dec, 2018 | Investment

September was another bumper quarter for investment returns. Equity markets continued to soar with the NZ and global share portfolios returning 7.4% and 7.3% respectively for the quarter. The performance of the lower risk bond portfolios was more mixed but with small positives still being achieved. This all means that the Growth and Balanced Funds performed more strongly than the Income Fund in the September quarter.

Investment returns at 30 September 2018, before fees and tax:

The table with ID 9 not exists.

Post-September we have seen some significant gyrations in market performance. October has sometimes been a more volatile month for stocks and 2018 was no exception. Exactly what drove a significant downward adjustment in equity markets is open to debate, but fingers generally point to increased concerns about global trade, European and emerging markets uncertainty and an increase in worry about global growth prospects, inflation and rising interest rates. The early part of November has seen some reversal of this impact. However, the volatility continues and we imagine it could become a regular feature in markets.

We will continue to keep an eye on the situation and remain vigilant. We do not consider it necessary to alter our investment strategy at this point but will if we perceive things have changed and consider it desirable to act.

It is tempting for members to react when market volatility increases. Unfortunately, that’s not always a good idea and we encourage you to look through short term movements. However, what is good to do from time to time is to check you are in the right fund for your risk appetite and the length of time you have until retirement.

Time – the asset money can’t buy

by Jo Cheramie | 4 Dec, 2018 | Investment

When it comes to investing young people have a huge advantage: TIME. Time – you can never get it back. It’s the asset money can’t buy. The sooner savings begin, the sooner compound interest can start and its ‘magic’ needs time.

Being in KiwiSaver gives a practical way for parents to talk to their children about money, about budgeting, about investing for the future, about learning to appreciate that saving is a slow process. Appreciating the difference extra contributions make. Appreciating that there is no such thing as a free lunch and so fees are charged. Great news, from 1 January 2019 we’re not going to be deducting fees for members under age 18.

Getting young people into regular savings and investment habits will help with setting them on a path to a secure financial future. You can help with this in your role as a parent, grandparent, older sibling, godparent.

Savings and investments are for many purposes. Saving to spend on something specific like a holiday, a car. Saving for future events such as tertiary study. Saving for the just in case event. Saving for the longer term and that is where KiwiSaver fits in.

KiwiSaver can work well if young people are invested in the right investment fund, and regular contributions are made. Once they reach 18 then there are the other benefits of the Government contributions and once they start work, employer contributions.

Investing in a KiwiSaver scheme also provides younger members with an opportunity to understand how market-linked investments work through the diversification of asset classes (shares, property, fixed interest etc.) and that, while investment returns can go up and down, over time they generally grow.

KiwiSaver is a great option to consider for longer-term saving. Christian KiwiSaver Scheme provides the opportunity to belong to a scheme that cares about how investment returns are made.

Investment returns to 30 June 2018

by Editor | 26 Jul, 2018 | Investment

Another positive quarter ensured that solid returns were reported for each of the funds in the quarter ended 30 June 2018. The benefits of diversification were evident with lower returns on bonds being more than offset by exceptional returns for shares. Christian KiwiSaver Scheme also invests in unique asset classes like forestry, mortgage loans to Christians and select private equity investments which over the long run have further diversified and enhanced returns.

Whilst many uncertainties exist, the mood remains upbeat – particularly in the US where corporate profits are strong – and positive sentiment may continue for a time yet despite the reported potential for trade wars, higher inflation and reduced growth. Other significant influences in the quarter included ongoing Brexit discussions, political developments (e.g. the Italian election), and denuclearisation dialogues. Given the many uncertainties and current elevated asset price levels we continue to invest cautiously with a focus on quality assets, i.e. those that have a greater chance for preserving capital whilst also providing a fair return on that capital.

Investment returns at 30 June 2018, before fees and tax:

The table with ID 4 not exists.

Investment returns to 31 March 2018

by Editor | 11 May, 2018 | Investment

Returns over one, three and five years were all positive. However, in the latest quarter investors were reminded that returns are not always positive. The three-month returns were affected by many things but largely concerns about international trade, growth and interest rates. Where will the trade tensions between nations lead? What might they do to growth? Do current interest rates reflect the expected outcome?

These concerns led to some large share price movements in the quarter. Despite the ongoing uncertainties we remain cautiously invested (across each of the Income, Balanced and Growth Funds). By cautious we mean invested in assets where we expect to get a fair return and the capital back over the long haul.

Investment returns at 31 March 2018, before fees and tax:

The table with ID 3 not exists.

It’s not easy being green!

by John McCrystal and Mark Wilcox | 14 Mar, 2018 | Investment

The love of money, as it has famously been said, is the root of all evil. Yet money can also do good in the world, and at the very least, it can be used in a way that does not harm. That, at any rate, is the philosophy underpinning the notion of ‘ethical investing’ for Christian KiwiSaver Scheme (formerly Koinonia).

‘Ethical’ investing is currently fashionable amongst funds managers, according to Mark Wilcox, the Scheme manager’s Chief Executive. In 2016, it was revealed in the news that many KiwiSaver funds were invested in activities as dubious as the manufacture of landmines and cluster bombs. Since then there has been a scramble amongst other players in the market to assure their investors that they too are ethical.

Applying high-minded principles to the real world is fraught with hidden complexities and grey areas. It’s not unlike the trouble people have once they have decided to have little or no environmental impact or to be carbon neutral. Try it and you’ll soon find, in the words of Kermit the Frog, that it’s not easy being green.

Corporations have much the same problem, and that’s why there is often such a difference between the gloss the marketing department puts on and the reality — the so-called ‘greenwash’ effect.

The difference between our Scheme and many of its more mainstream competitors is the Christian values that are at the heart of its investment philosophy. Christian KiwiSaver Scheme has had an ethical investment policy since its inception (as Koinonia). The Church’s mission with regard to working positive change in society as well as preserving and protecting creation continues to set the tone. The Scheme follows the Church’s lead when seeking business operations to invest in and that’s why we do our best to avoid investments in gambling, pornography, and military weapons.

‘Like any other KiwiSaver scheme, the stewardship of its members’ funds is Christian KiwiSaver Scheme’s primary objective’ explains Simon Brodie, the Chief Investment Officer. He and his team of investment managers have a fiduciary duty to act in the best interests of those who have entrusted them with their money.

Applying an ethical investment policy, therefore, requires judgement. For example, an investment in Boeing might be a good decision in terms of returns.

This US manufacturing giant is a good example of how the two imperatives — the need to generate returns on investment on the one hand, and to be ethical about where money is invested on the other — can pull in opposite directions. Boeing is America’s largest exporter and one of the stocks that comprise the Dow Jones Industrial average. For most investors, it would be a must-have portfolio item, but the Scheme won’t invest in Boeing, the manufacturer of airliners because in doing so it would be investing in Boeing, the manufacturer of cruise missiles.

There is more to taking an ethical stance on investment than merely following the money to see what it’s up to though. How a company governs itself is a factor as well. A current issue that we take interest in is the remuneration of executives in listed companies. The Scheme manager will regularly vote against director motions for executive remuneration.

“The interpretation and application of investment ethics is a constantly evolving discipline,” says Mark Wilcox. “The shift in our attitude toward fossil fuel production is a classic example. Society’s attitudes to labour relations have come a long way in recent years. One way we can discharge our ethical policy with integrity is by investing much of our funds directly, rather than via external funds”.