Investment | Christian Kiwisaver Scheme

Investment returns to 31 March 2019

by Editor | 2 May, 2019 | Investment

It has been a very positive and pleasing quarter, a relief for most after the very shaky end to 2018, and a reminder to investors to focus on the longer term. Good returns were achieved by the funds in all periods to 31 March 2019.

The rebound in markets is put down to a number of factors including a reversal in the US Federal Reserve’s monetary policy stance, hope for a positive outcome in the U.S.-China trade deal negotiations and hope for further stimulus from the Chinese government, all factors that may lead to an increase in global growth in the second half of 2019. Given elevated asset prices and risks to future growth projections, we remain cautiously invested but alert i.e. we will be keeping an eye on economic data in the upcoming quarter to see it is strong enough to justify further gains.

Investment returns at 31 March 2019, before fees and tax:

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Investment returns to 31 December 2018

by Editor | 1 Feb, 2019 | Investment

The December quarter saw a sharp drop in the value of shares which resulted in negative performances for the Growth and Balanced Funds. Strong performances in earlier times, however, ensured that returns remained positive in periods greater than 1 year. While our funds performed better than most for the quarter (reflecting our more conservative investment philosophy), negative performances are never nice to experience and can be frightening. However, they need to be kept in perspective i.e. remember the great and stable returns leading up to them! Diversification benefits were also evident in the quarter as gains on income assets (bonds) partially offset losses on growth assets (shares).

It’s important when there’s been a significant drop in the markets not to be alarmed. Remember that returns are generally positive over longer time frames. Interestingly, since 1 January this year share markets have rebounded significantly (by about 7% in January). What caused the bout of volatility throughout the December quarter? Even though a number of the concerns had been around for a while investors got more nervous in the quarter about some items including China and U.S. trade war developments, Brexit, global growth and monetary policy (particularly in the U.S.).

Large fluctuations in asset prices will inevitably occur again. In this more volatile environment, we remain extra vigilant, diversified and cautious in our approach to investing your monies.

Investment returns at 31 December 2018, before fees and tax:
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We have two important messages for you. Firstly, again, don’t panic and secondly make sure you are in the investment fund that best suits you. Changes in the investment markets don’t change your investor type. Changes in your personal circumstances are what influence your investor type.

Over time investment markets will have their ups and downs and occasionally the downs are large enough to result in a negative return. The December quarter is just one quarter. In the last 20 quarters (5 years), our Income Fund has had 18 positive quarters, the Balanced Fund had 17 and the Growth Fund had 16.

Ethically growing your investment

by Amit | 1 Feb, 2019 | General, Investment

As Christian KiwiSaver Scheme members we are a group of “ethically-minded Christians” who believe in the value of sound stewardship and in investing in assets that reflect Christian values. That could sound rather boring and dull.

However, one of our investments is neither boring nor dull but rather exciting. Back in 1992, The New Zealand Anglican Church Pension Board had the foresight to purchase a block of land in the Tukituki Valley, a spectacular part of the Hawkes’ Bay.

The Māori word ‘Tukituki’ means to demolish; this possibly refers to the power of the river when it is in full flood. The Tukituki River flows all the way from the Ruahine Ranges out to the Pacific Ocean in the southern part of the Hawkes’ Bay coastline.

Aerial view of Hapua Forest Park before harvesting.

While that English translation of Tukituki has that meaning of demolition, the Board’s investment in the Tukituki Valley had the opposite meaning. The Board purchased that block of land and developed a 672 hectare pine forest which it named Hapua Forest. That block is bringing new life and growth.

The first forest was planted during the 1992-1993 season. This planting occurred at a time when planting trees were not seen as positively as today in terms of countering the effects of global warming. During their lifetime, these trees bring new life and contribute positively to their environment by, such things, providing oxygen and improving air quality, conserving water and stabilising the soil.

As you can see from the picture below, that first forest has now matured and is in the process of being harvested. Harvesting started back in 2016 and should be completed during 2019.

Harvesting in the Hapua Forest.

But the land is not being left barren once that first crop is harvested. As land becomes available after the harvesting, further tree planting is occurring. This process started during the 2018 winter. So far, approximately 62,500 new seedlings have been planted. Up to now, one quarter of the forest area has been replanted.

New seedling growing in Hapua Forest Park.

Whereas members in other KiwiSaver schemes may have shares in a forestry company, Hapua Forest is something that Christian KiwiSaver Scheme members directly own part of. While the Board bought the Hapua Forest back in the 1990s, the Christian KiwiSaver Scheme has owned a portion of it since the Scheme started in 2007.

Just as the trees in the Hapua Forest take up to 25 years to mature before they could be harvested, KiwiSaver savings are also a long-term investment looking toward when we retire and can benefit from the savings. For younger members that could be around 40 years – a period akin to nearly two crops of maturing pine trees at the Hapua Forest. Like the value of those trees in the Hapua Forest our KiwiSaver investment will fluctuate in value over time but will benefit Scheme members and our climate over their life.

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:

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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.

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