Inside Money

Business writer David Chaplin blogs on personal finance

Inside Money: Choice moments in KiwiSaver month

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Photo / NZ Herald
Photo / NZ Herald

February must have been KiwiSaver Action Month.

As well as the long-awaited sale of Tower to Fisher Funds (something of an anti-climax when the official news was announced), February saw:

The long-awaited decision to merge the Axa and AMP schemes;

ASB giving up on active management (its main KiwiSaver scheme, the popular one, invests by the index) as it shut the doors on its almost-forgotten FirstChoice scheme;

The Warren Couillault (formerly of Fisher Funds) KiwiSaver venture, Generate, revealing its underlying hedge fund-of-funds strategies.

In other news, Fidelity also formally launched a couple of extra options on its KiwiSaver menu. The two new funds were actually added to the Fidelity list in November (along with another life-cycle option called Life Phases) and provide an interesting first for KiwiSaver investors.

The two products, the Asset Class Conservative Kiwi and Asset Class Growth Kiwi funds, will be managed by Dimensional Fund Advisors, a name probably not familiar to many retail investors.

Dimensional was founded by some Nobel Prize-class boffins in the early 1980s and, to date, has only been available via financial advisers or institutional-style investments.

The US-based manager also prides itself on never paying product commissions, and hence deals only with fee-based financial planners.

Normally, access to investing with Dimensional in New Zealand is restricted to a select number of accredited financial advisers and institutions, a launch press release explains, however, the Fidelity KiwiSaver Scheme now allows KiwiSaver members the opportunity to utilise the Dimensional investment approach.

Interestingly, the Dimensional funds have been brought to the KiwiSaver table by Hastings-based financial adviser, Nick Stewart, who will act as asset consultant/adviser for the Asset Class products under the newly-formed entity, Stewart Group Asset Management.

So while consolidation occurs apace at the big end of town (Fisher/Tower, AMP/Axa etc) the fact that offerings as opposed as Generate and Dimensional are willing to give KiwiSaver a go is positive for fans of investment choice.

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