Navigating market volatility with faith and perspective

Navigating market volatility with faith and perspective

“For we live by faith, not by sight.” – 2 Corinthians 5:7

If you’ve noticed your KiwiSaver balance shift recently, you’re not alone. Global markets have entered a period of volatility, largely in response to the tariffs introduced by the United States which have contributed to broader economic uncertainty.

While this volatility can feel unsettling, it’s important to step back and view these market movements through the lens of long-term investing.

Why are markets volatile right now?

The recent introduction of broad tariffs by the United States has impacted global trade and investor confidence, triggering declines in share markets across many countries. These fluctuations have also affected KiwiSaver funds, especially those with exposure to growth assets like shares.

While the United States tariffs are receiving significant media coverage right now, market corrections like this aren’t new. They help rebalance markets after long periods of upward performance. In fact, the markets had been performing strongly for quite some time, and this adjustment, though uncomfortable, is part of maintaining long-term health.

KiwiSaver is a long-term investment

Christian KiwiSaver Scheme is designed for the long haul, helping members prepare for retirement or take their first step onto the property ladder. These are goals that often span decades, not days or weeks.

It’s normal for balances to rise and fall over time. What’s important is how we respond. During periods of uncertainty, keeping perspective can make all the difference. Patience and discipline are key when it comes to long-term investing.

Here are a few practical reminders:

Avoid checking your balance too often

It’s natural to want reassurance when markets feel unsettled, but checking your balance frequently, especially during periods of volatility, can lead to unnecessary stress. Daily fluctuations are normal and often don’t reflect the bigger picture. Reacting emotionally to these short-term movements can lead to hasty decisions that may not serve your long-term goals.

Expect fluctuations

Markets rise and fall over time, that’s part of how they work. Economic events, policy changes, and global developments can all cause short-term movements, but this doesn’t mean your investment is off course. Volatility is a natural part of long-term investing, and history shows that markets tend to recover and grow over time.

Changing funds in a downturn can turn a movement into a loss

Switching funds when markets are down might feel like a way to avoid further losses, but it can have the opposite effect. When you move your investment to a lower-risk fund during a downturn, you may be turning a change on paper into a permanent loss of money, and you may be missing out on a future recovery. Staying invested in a fund that matches your long-term goals and risk appetite allows your savings the chance to grow over time. Watch out for our next blog which will explain this concept further.

As Proverbs 21:5 reminds us:

“The plans of the diligent lead to profit as surely as haste leads to poverty.”

How Christian KiwiSaver Scheme is managed

At Anglican Financial Care, we take a careful, values-led approach to managing Christian KiwiSaver Scheme.

Here’s how that translates into action:

  • Risk-aware investing: Our team continuously monitors the markets and makes thoughtful decisions to support members’ long-term goals, even in times of uncertainty.
  • Diversified portfolios: Each of our Funds – Growth, Balanced, and Income, includes a mix of local and global assets, which helps reduce the impact of any single event or market dip.
  • Active management: We don’t take a ‘set and forget’ approach. Our funds are actively managed, allowing us to respond to changing conditions while staying aligned with our values.
  • Ethical stewardship: Our equity investments are screened against our Ethical Investment Policy. We focus our investments on the entities that produce more good than harm and make deliberate investments in entities making the transition to clean technology and sustainable infrastructure.

A message of reassurance

Market downturns are a normal part of the investment journey. What matters most is the path forward. By staying the course, focusing on what you can control, and trusting in the process, you give your investment the time it needs to recover and grow.

If you’re unsure about your fund choice or want to understand more about your options, we encourage you to speak to a financial adviser. You’re also welcome to contact our member services team for general support.

In times of uncertainty, keep your focus on what truly matters: your long-term goals, your community, and your faith. It’s here that you’ll often find clarity and peace. 

Christian KiwiSaver Scheme is managed and issued by The New Zealand Anglican Church Pension Board (trading as Anglican Financial Care). The Product Disclosure Statement can be found here Documents | Christian KiwiSaver Scheme.

Anglican Church Backs Christian KiwiSaver Scheme

Anglican Church Backs Christian KiwiSaver Scheme

At the Anglican Church’s General Synod/te Hīnota Whānui in May 2024, the Christian KiwiSaver Scheme received strong backing from the Church with a resolution that encourages all Anglican institutions to select the Scheme as their employer chosen KiwiSaver scheme.

The details of the KiwiSaver scheme founded on Christian values and Christian ethical frameworks was explained to the Synod and subsequently reported on the Anglican Taonga website.

The full article is here

Your KiwiSaver Check Up

Your KiwiSaver Check Up

Just like you get a Warrant of Fitness for your car, it’s important to regularly check your KiwiSaver Scheme to make sure it’s still set up the way you want. Here are some easy tips to make sure your KiwiSaver is in top shape. We recommend doing this once a year, either at the start of the year or when you get your annual member statement.

1.   Check if Your Investment Profile is Right for You.

This is about where your money is invested. Does your choice of investment fund, match the level of risk you are comfortable taking?
The Sorted website has a handy tool called Investor Profiler. You answer a few questions, and it helps you find out what type of investor you are and what kind of investment mix is best for you.

2.   Are You Contributing Enough?

Think about whether you can afford to put in more money or make extra contributions. If you stopped making contributions, is it time to start again?

The Sorted website also has a KiwiSaver Calculator. Answer a few questions to see how big your balance could be at age 65 and how much you could get each week in retirement. Try different contribution rates to see how they affect your savings.

3.   Is your Personal Investor Rate (PIR) correct?

Your PIR is the tax rate we use to calculate the tax on your investment earnings. Make sure you’re using the right PIR. You don’t want too much tax taken from your earnings, or too little and end up with a tax bill. Your PIR for the current tax year is based on your total taxable income in either of the last 2 tax years. If that changes, your PIR might change too. Inland Revenue can also tell us to change your PIR if they think it’s wrong. Our website has a guide to help you calculate your PIR

That’s it! Checking these three things every so often will help make sure your KiwiSaver account is working for you. Our team is happy to help with any questions you have.

Partnering with AMLHUB

Partnering with AMLHUB

Complying with Anti-Money Laundering (AML) rules is essential for many businesses, including banks, law firms, real estate agents, and KiwiSaver providers. Besides verifying a new client’s identity and address, ongoing checks are required for existing clients too.

To help us meet our AML obligations, we’ve partnered with AMLHUB Services Ltd. They provide us with software and outsourcing services, giving both the Scheme and its members an efficient and affordable AML compliance tool.

When we need information for AML purposes, you will receive an email from us. It will show you exactly what you will get from AMLHUB so you can be sure the email and text you will receive are legitimate and not a scam.

By working with AMLHUB, we ensure that we stay compliant and protect our investments against money laundering and terriorism financing. If you have any questions, our team is here to help.

Your KiwiSaver Check Up

Get Your Government Money

Each year, the government offers a bonus (called a government contribution) to help boost your KiwiSaver account. This is a great way to get closer to your KiwiSaver goals. Here’s how you can get the maximum government contribution for KiwiSaver.

What is the Government Contribution?

The government contribution is an annual bonus from the New Zealand government for eligible KiwiSaver members. You are usually eligible if you:

  • Are making contributions to your KiwiSaver account,
  • Live mainly in New Zealand,
  • Are 18 or older, and
  • Do not qualify for the retirement benefit.
  • For more details about eligibility, please click here

    You can get up to $521.43 per year from the government. To get this maximum amount, you need to contribute at least $1,042.86 to your KiwiSaver account each year. Even if you can’t contribute that much, you can still get some government money. For every dollar you contribute, the government adds 50 cents, up to a maximum of $521.43 per year. Here’s how it breaks down:

    Your personal contributions KiwiSaver government contribution
    Weekly Annual Annual
    Over $20 Over $1,042.86 $521.43 Max
    $20 $1,042.86 $521.43
    $15 $781.14 $390.57
    $10 $521.43 $260.71

    How to Get the Maximum Government Contribution

    If you’re an employee, your contributions come from your salary. If this isn’t enough to reach $1,042.86, you can make extra voluntary contributions to get the maximum government money.
    If you’re self-employed, you can make voluntary contributions directly to your KiwiSaver account.
    Remember, the government contribution is calculated yearly, from July 1 to June 30. To get the full $521.43, you need to contribute $1,042.86 by June 30 each year.

    Getting the maximum government contribution is a great way to boost your savings. If you do this every year, you could get over $5,000 in your KiwiSaver account from government contributions alone after ten years (not including any investment returns or losses). This can help you get closer to your retirement savings goals.

    How to Check Your Contributions

    To see if you’ve contributed enough, log in to the member portal on the Christian KiwiSaver Scheme website. Click on the “Maximising GCs” tab to see a summary of your qualifying contributions for the year and find out if you’ve reached the target or how much more you need to contribute.

    Make the most of this government bonus and boost your KiwiSaver savings today!

    Investment Returns at 30 June 2023

    Investment Returns at 30 June 2023

    Investment returns (before tax and fees)* for the quarter ending 30 June 2023 are:

    Fund 3 months 1 Year (p.a.) 3 years (p.a.) 5 years (p.a.) 10 years (p.a.)
    Growth Fund 3.9% 11.4% 9.0% 8.5% 8.5%
    Balanced Fund 2.9% 8.3% 5.8% 6.1% 6.8%
    Income Fund 0.7% 2.3% 0.0% 1.5% 2.6%

    * rounded to one decimal place.

     

    Economic growth has been somewhat sturdy as we report on another positive quarter. In our mind, there are two key questions in the market at this point.

     

    Will interest rates rise further from here?

    Reductions in energy prices (e.g. oil), easing supply constraints, and reduced spending on goods have all contributed to a reduction in headline inflation. There are some lingering concerns around the pricing of certain services such as costs of travel, hospitality, wages, and food. However, central bankers around the world have managed to, for the most part, cool inflation in a red-hot economy.

     

    Are share prices today correct in anticipating a rosy future?

    Share and bond markets have very differing views today about future outcomes. Share investors are optimistic, feeling the worst has passed and better times are ahead. However, bond investors are cautious because of their concerns about inflation.  

     

    Share investors feel optimistic largely because share prices have increased significantly in the past year. For the year ended 30 June 2023, the prices were up for indices such as the USA Dow Jones (12% price increase), S&P 500 (18% price increase) and NASDAQ (25% price increase). There has also been the belief that the gains from artificial intelligence (AI) may be significant, especially for some technology companies.

     

    At the same time, share investors may feel that the market is currently experiencing some form of stability. The VIX, an index that measures the expected volatility in share prices, is reporting that the stock market expects to be half as volatile compared to what it reported in October last year.

     

    Bond investors remain cautious, given that interest rates have risen strongly in the past year. There is still considerable uncertainty about whether central banks will raise rates further. Whilst headline inflation (the rate reported by the Consumer Price Index) has reduced, domestic inflation (which mainly considers housing, transport, medical, electronics prices etc. and does not include food and energy prices) remains stubbornly high and of concern to central banks.

     

    While we are reporting on another positive quarter, there is a sense that investors are not all in agreement in their feelings about the market at this point in time because there are plenty of reasons to be both optimistic and cautious.

     

    We think interest rates could rise further, and shares come under pressure at these levels. We remain cautiously invested, diversified and continue to hold higher-than-normal amounts in cash.