Why you should diversify your portfolio – and how to do it
Disclaimer: This information is general in nature and should not be regarded as specific investment advice. Craigs Investment Partners do not accept liability for the results of any actions taken or not taken upon the basis of this information, or for any negligent mis-statements, errors or omissions. Those acting upon this information and any recommendations do so entirely at their own risk. Craigs Investment Partners did not take into account the investment objectives, financial situation or particular needs of any particular person in the preparation of this information. This information does not constitute a representation that any investment strategy or recommendation is suitable to your individual circumstances or otherwise constitutes a personal recommendation. Craigs Investment Partners recommend seeking advice from a licenced financial adviser about your financial situation and goals before acquiring any financial products or making any investment decision. To talk to one of Craigs Investment Partners' financial advisers, please call 0800 272 442. Craigs Investment Partners Limited is a NZX Participant firm. The Craigs Investment Partners Limited Financial Advice Provider Disclosure Statement can be viewed at craigsip.com/tcs. Visit craigsip.com.
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Photo: RNZ More KiwiSaver schemes allow investors to choose their own investments - but should you do it? This week, Sharesies expanded its 'self select' KiwiSaver option to include US shares and exchange-traded funds. Members can now add more than 150 New Zealand and US investments to their KiwiSaver portfolios, alongside 'base funds'. Up to half a KiwiSaver member's plan can be allocated to their own investment picks, with a maximum of 5 percent in each pick. To varying degrees, Craigs Investment Partners, NZ Funds, Nikko, InvestNow, Kernel and KiwiWRAP also allow investors to select where their money goes. Sharesies super and funds general manager Matt McPherson said investors said they wanted more connection and control over what was available. "People who want to take some of the control, but not all of it are who we're building for." He said about 40 percent of Sharesies KiwiSaver members had some of their own picks and about 10 percent of their contributions going into those. He said the most popular self-select pick was the S&P500. "What people like about that is that it's very low cost and it's very passive." Investments in big global brands were also proving popular, such as Microsoft, Apple and Amazon. Each stock was in its own pie fund for Sharesies investors to simplify tax considerations. Genesis Advice financial adviser Edward Glennie said it was sensible for KiwiSaver schemes to have limits on how much choice investors could have, "If you're allowed to put 100 percent on one particular stock, that might compromise your returns, particular if you're unadvised." He said he would work with clients through KiwiWRAP to help them set up a suitable portfolio. Self-select options could sometimes have higher costs, but he said that was probably the direction the market was headed. It also allowed people to get away from the 'one manager' model that had been dominant since the scheme launched 18 years ago. "I think the market is gradually opening up." Data director Greg Bunkall said it was difficult to anticipate most individuals outperforming fund managers with their own picks. "In Australia, studies comparing self-managed superannuation fund (SMSF) portfolios with APRA-regulated funds present mixed results, with superior returns observed among SMSFs that possess substantial balances and leverage the expertise of financial advisors in their decision-making processes." McPherson said the option would not be the right thing for all investors. "Fund managers do great work of finding undervalued companies and investing in them, so that's why the product is built around this idea of, if you want to, you can do a bit of it, as opposed to having to take on all the responsibility." McPherson said Sharesies' model was more like the self-directed options seen in Australian, than full self-management. Kernel Wealth founder Dean Anderson said members could "mix and match" from Kernel's 21 funds. "We've found overall investors are very informed, with fund selection often reflecting an investor's age and life stage. Of course, Kernel isn't a default provider, so investors have typically made an educated decision to move to us and have realised the benefits of being engaged with their KiwiSaver. "Consistently outperforming the market over time is incredibly challenging, but KiwiSaver members, who customise their plans, often have a specific purpose in mind. Some may want 100 percent of their KiwiSaver invested in global shares, others might prioritise values by choosing ESG-centric funds or they could be aiming to diversify away from other assets they own, selecting funds that balance their overall wealth. "As investors approach the time to access their KiwiSaver, the self-select function becomes even more valuable. They might start to bucket their assets-moving funds for the first few years of retirement spending into a cash fund, while keeping another bucket in higher-growth assets to support their financial needs 10, 20 or even 30 years down the line. "This flexibility is incredibly useful, rather than being forced to only be in one strategy."
Otago Daily Times
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Investment adviser aiding the community
She's a woman on a mission to help others, whether through her job as a financial adviser or via service organisation Rotary. Business editor Sally Rae talks to April Eden. Meet April Eden from Dunedin — and yes, that really is her tagline. The rhyme is on purpose and this powerhouse is hot on her own purpose, particularly helping women build confidence with money and take control of their financial futures and flying the flag for service organisation Rotary as a vehicle to do good in the world. English-born but Dunedin-proud, her road to becoming an investment adviser might not have taken a traditional trajectory but she was determined to show her daughters she could achieve something and make her mark on the world. It was when her first child was young that Mrs Eden, 33, decided she did not want to be "another statistic". Having quit secondary school at the beginning of year 12, she worked in hospitality. At 19, she became pregnant and, while "not quite a teen mum", she felt she was still not a full mum in the eyes of society. With creative flair, she had initially thought she would pursue something like graphic design but at 23 found her aptitude in accounting. When she decided to return to study, backed by her supportive partner, she did not want to commit herself, knowing that secondary school and herself did not agree with each other. So, she did a certificate of business administration at Otago Polytechnic and discovered it was very different from secondary school — "you're in charge of yourself". Having enjoyed that, she later completed a Bachelor of applied management, switching majors from marketing to accounting, at the polytechnic. Those early years were a whirlwind which included getting married, having a second child and buying and selling several houses. While studying, she was one of three New Zealand-based students selected to take part in a student workshop held as part of an entrepreneurs' summit in China in 2018, coincidentally all three coming from Otago Polytechnic. But then she could not find a job as an accountant, despite "interviews galore" all over the country. She specifically wanted to get into audit and risk, with a desire to know how businesses worked, but interviews would indirectly raise the matter of her having two children, questioning how she was going to manage the travel. Also, she was getting blank looks when she asked what the career path looked like for her three years down the track. After potentially uprooting her husband, children and life, she did not want to be uplifting them again in three years' time and she wanted to show loyalty to a company — somewhere she could "grow with them". It was when she got an interview for a private wealth assistant at Craigs Investment Partners that she was shown exactly what a 10-year career path looked like. She started there in 2018 and has worked her way up, next January marking four years as an adviser. Bubbly, colourful and a straight talker, Mrs Eden admitted she loved her job. "It sounds really corny, but no two days are the same, there's so much variety in a day." Ultimately, it was a job that was all about relationships and, with a love of people, that flowed through to her extracurricular passion which was Rotary. She did not want to be seen as "just another investment adviser". And when clients or potential clients searched her name, she did not want it to solely come up with her business profile. She wanted it to come up with all the things she was doing in the community that she was passionate about, so they could feel like they were getting to know her a little before they came to see her — "an ordinary person with a pretty cool job, that I actually do care — and I do". President of Rotary Dunedin Central and on the board of District 9999, the Rotary district which covered the South Island, she said it was unfortunate the organisation had the perception of an "old man's club". Her club was 50% female, and the average age was late 50s. "There is still such a need for Rotary, arguably now more than ever," she said. This year, a team from Ignite Consultants Otago, the student-led voluntary organisation which offered free consulting services to not-for-profit organisations, worked with Rotary Dunedin Central. The team was charged with helping make the club more accessible and appealing to young professionals and worked closely with Mrs Eden. With only one of the students knowing what Rotary was before the project, they looked at it from a "completely outside perspective" with no preconceived ideas. Being able to take their suggestions back to the club and further afield was a chance to say "this is literally what young people are saying". For the younger generation wanting to do good in the world, Rotary — which has a seat at the United Nations — could be the vehicle to allow them to do that, she said. Mrs Eden was on a mission to help bring Rotary into 2025 and beyond by breaking the stereotypes, modernising the message and ensuring the organisation continued to do good for decades to come. It was a fine line to tread as she did not want existing members, who had so much wisdom and connections, to be alienated. But she was adamant the only tradition that Rotary had was that it "does good in the community". The organisation had lots of different club structures and options. While there were still some clubs which met weekly, there were also online clubs which did their project planning online, and some clubs which dealt specifically with one cause. "It's just that balance between reminding our existing Rotarians why you joined in the first place — because you wanted to do good in the community — and then telling the next generation that 'hey, we're here and we'll help you do these good things that are important to you now'," she said. Personally, Rotary had given her purpose, friendships, professional and personal development and the chance to make a real impact. Her club was very open to change and trying new things. It had three or four key fundraising projects a year; it helped with the Dunedin Brick Show, featuring all things Lego, at the Edgar Centre and the money raised went to a youth-oriented charity — last year it was Rock Solid. It has the Rotary book sale next month and it also sells pea straw. It bought a commercial washing machine for the Night Shelter and has helped re-establish gardens and an orchard at Bradford School and has also helped the astronomical society. "We recognise that the little guy needs help too. Buying a new laptop for an organisation ... could be the difference between them paying rent on a building they're using for a month or two," she said. Mrs Eden said, when asked how she managed to balance everything, that she worked very hard and she had a fantastic support system with her husband. When it came to resilience in leadership, she was inspired by her elder daughter, who was one of two children who went missing after a bush walk in the Mavora Lakes area in Southland in July 2023. They were found by a search party the following morning. Her daughter came out of that experience braver and even went skydiving for her 13th birthday. Watching her navigate that experience, Mrs Eden said she could not "be the scared person". "Leadership is not about how to avoid the storms, it's how you navigate them and how you bring the others through with you," she said.
