Markets with Madison: Banks turn up the heat on high-growth funds

Banks and fund managers alike want a slice of an increasingly aggressive investor.

In the past week, ASB and BNZ have launched high-growth investment funds with a near 100 per cent allocation to riskier assets considered to grow in more value, like international equities.

It’s not surprising given the Nasdaq is up 36 per cent in the year to date (thanks to the “Magnificent Seven” stocks - Apple, Amazon, Alphabet, Nvidia, Meta, Microsoft and Tesla) and the S&P 500 by 18 per cent.

Milford Asset Management’s chief executive says the heat on high-growth funds is because more investors are shifting to a longer-term mindset - but they shouldn’t expect consistent returns of the latest magnitude.

“Going out to 2030 I still feel there will be good returns, whether they will be of the same magnitude as we’ve seen in the wonderful last 10 years, maybe not,” Mark Ryland told Markets with Madison.

“People have just got to be aware that you’re not just jumping onto the latest bandwagon, really understand what you want, understand what it’s doing.”

Milford is the fifth-largest KiwiSaver manager and has been in the high-growth and aggressive game for years.

Watch today’s episode of Markets with Madison above to see what could be in store for high-growth investors next - including potentially cheaper fees.

Get investment insights from the experts on Markets with Madison every Monday and Friday on the NZ Herald.

Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.