We’ve had customers ask us over the past few months: ‘what things actually make up my KiwiSaver account’? ‘What do my savings buy, or what am I an owner of?
Every six months we upload to our website the full holdings for each of the funds in the ASB KiwiSaver Scheme. As with many things investment or finance related, we understand there can be a lot of information to digest, and it can be confusing. So, we want to offer a bit of help to get things started.
To simplify things, let’s start at the basics.
Each of the ASB KiwiSaver Scheme funds is made up of a combination of income or growth assets in different proportions. Think of an orange – split up by it segments or slices, each one representing a different asset class.
Income assets are things like bonds, fixed income, or savings accounts and term deposits – things that generally provide a fixed income or rate of return. This is similar to a bank savings account or a term deposit that you might have.
The other side is growth assets – shares, equities, listed property for example. These types of assets often have the potential for a higher investment return over the longer term, but they also tend to have higher investment risk, meaning their value has the likelihood of rising and falling much more than income assets.
This is why it’s important you choose a KiwiSaver fund specific to your personal savings goal and timeframe - because you don’t want to use an investment that might fall in value considerably when you are just getting ready to withdraw the funds, such as for your first home deposit. But on the flip side, you also may not want to hold just income assets and miss out on a lot of potential growth if you won’t be touching your KiwiSaver balance for a very long time - like when you’re saving for retirement and it’s many years away.
Let’s look at the ASB KiwiSaver Scheme Growth Fund as an example. Our Growth Fund has a split of 20% income assets, and 80% growth assets. This means it has a much higher allocation to growth assets, so it’s suitable for those investors that have a longer time horizon and can ride any potential ups and downs in values in the short term.
For the Growth Fund - the growth asset (80%) component of the fund is made up of the following asset classes:
- Australasian Equities
- Global Equities
- Emerging Market Equities
- Listed Property
- Other (listed infrastructure).
If you want to check what your fund is made up of, you can find this on our ASB KiwiSaver Scheme Quarterly Fund Updates page.
The third, and final level gets you into individual holdings within asset classes - i.e., what your contributions and savings are allocated and invested in to.
Continuing with our Growth Fund, here is an example for each asset class to help showcase what savers are invested in:
- Bonds or fixed income - NZ Government Bonds
- Savings or term deposits - Citibank US dollar account.
- Australasian Equities - Fisher & Paykel Healthcare (makers of sleep apnoea and respiratory breathing medical equipment)
- Global Equities - Apple
- Emerging Market Equities - Alibaba (China’s largest online retailer)
- Listed Property - Kiwi Property Group Ltd (Owner of Sylvia Park Mall)
- Other (listed infrastructure).
We update these on asb.co.nz every six months, so the very latest holdings will be available after the end of September.
To keep updated with the latest market insights to help you make smart decisions about your investments listen to our monthly ASB Investment Podcast.
See more of ASB’s latest financial news and announcements here on our blog.
Interests in the ASB KiwiSaver Scheme (Scheme) are issued by ASB Group Investments Limited, a wholly owned subsidiary of ASB Bank Limited (ASB). ASB provides Scheme administration and distribution services. No person guarantees interests in the Scheme. Interests in the Scheme are not deposits or other liabilities of ASB. They are subject to investment risk, including possible loss of income and principal invested. Fees may change. For more information see the ASB KiwiSaver Scheme Product Disclosure Statement available from www.asb.co.nz and the register of offers of financial products at www.disclose-register.companiesoffice.govt.nz (search for ASB KiwiSaver Scheme).