Kiwisaver - Returns to March 2024

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Forums › Finance and wealth management › Kiwisaver - Returns to March 2024

ockel

2031 posts

Uber Geek

#312679 8-May-2024 08:58

Melville Jessop Weaver Investment Survey for the March quarter has been released.

A link for any interested https://mjw.co.nz/wp-content/uploads/2024/05/MJW-Investment-Survey-Mar-2024.pdf

And the Risk/Return graph for the 10 year period for judging your manager against all others in your appropriate risk class. Risk demands a return, you should be getting the best return for at any one level of risk (volatility).

Batman

Mad Scientist
29760 posts

Uber Geek

Trusted

Lifetime subscriber

#3227676 8-May-2024 09:53

Can I ask, does that mean we should all switch to one of the top ones, and which one would you recommend?

Mine is in the middle of the road

ockel

2031 posts

Uber Geek

#3227735 8-May-2024 10:28

Batman: Can I ask, does that mean we should all switch to one of the top ones, and which one would you recommend?

Mine is in the middle of the road

First some caveats. Past performance is no guarantee of future performance. Make sure that you understand your risk appetite and you're in the right style of fund. Understand who your manager is (and whether there have been any personnel changes that might explain differences between recent performance (1yr and 3yr) and long term performance (5yr and 10yr). There are some good investment teams, some lucky investment teams (every dog has its day) and some perennial underperformers (both in Kiwisaver and Managed Funds).

As an investor you should be demanding the best risk adjusted return (after fees and before tax). Some have lower fees and justify their existence on this, others have high fees but claim you're paying for the investment performance. Some well known investment commentators will tell you that active management isnt worth the extra fees, that no one can keep outperforming the market etc etc. Its an incredibly subjective area with plenty of strong opinions.

You could pay an investment advisor to suggest which manager to be with but their opinion is still only an opinion and still doesnt guarantee any better outcome for your KS investment.

So usual story Do Your Own Research. Talk to your family, friends, colleagues - ask they who they are with, why and what performance has been like. Read reports like the MJW quarterly (my preference cos it has the visual aid to help compare providers, which others dont) and Morningstar. Discuss the reports with the people you talk too. Take the manager reports with a grain of salt - its only marketing. They will never tell you that they're doing a crap job.

And vote with your feet. You're allowed to switch providers. Simple process that virtually every manager offers, the IRD does the rest.

Personally I make sure my manager, for the risk profile I have chosen, is in the top quartile (ie the higher dots in the cluster). And if the 3yr and 5yr returns are still in the top quartile then I stick with them. If not then I choose someone who is.

concordnz

472 posts

Ultimate Geek

Trusted

EMT (R)

#3227738 8-May-2024 10:35

@batman, If yours is in the middle of the road....make sure it doesn't get run over... :)
Didn't your parents ever teach you, 'don't play in the middle of the road? :)

On a more serious note,
Rankings can vary from year to year,
Stay(or move) into whichever one you feel most comfortable.

ockel

2031 posts

Uber Geek

#3227790 8-May-2024 10:52

And, for the record, I cant legally give you advice as I'm not licensed to do so under the Act. [But oddly my taxi driver tells me when its a good time to buy bitcoin]

I did say asks friends/family/colleagues who they are with and why. I'm with Milford as they have a good process, stable investment team and I think their risk adjusted returns are superior. They're still ranked 4th/15 on 1 year returns and 1st/15 on 3yr returns for my risk profile so I'm not kicking them out as yet.

BTW I have a significant personal portfolio which is buy/hold (I dont trade) and it has delivered superior returns relative to the market and most managers over the last 10 years. I consider that there are plenty of overpaid mediocre managers in the market just riding the gravy train.

Sixth Labour Government - "Vision without Execution is just Hallucination"

mattwnz

20141 posts

Uber Geek

#3227911 8-May-2024 15:25

ockel:

I consider that there are plenty of overpaid mediocre managers in the market just riding the gravy train.

I think this too. They often just take a % cut of the balance.

wellygary

8312 posts

Uber Geek

#3227913 8-May-2024 15:28

If I were in Superlife's Growth Fund I would be seriously asking NZX some questions as why over a 10 year period it was being out performed by their balanced fund....

They must have taken a bath on something somewhere.....