ASSET Magazine | Investing for Income

Mary Potter's one regret

Urgent call: Start using AI now

What's driving increase in health claims?

ISSUE 2 | 2025 | WWW.GOODRETURNS.CO.NZ

Investing for Income Exploring interesting new products, investment strategies and markets.

Proven Performance.

Unmatched Support.

When it comes to KiwiSaver, long-term performance matters.

We’re proud to report that our Moderate, Growth, and Focused Growth KiwiSaver funds have all ranked in the top three for 10-year returns every quarter they’ve been eligible since June 2023.* Grow your clients’ wealth with our award-winning funds – backed by expert support when you need it.

And don’t just take our word for it – we’ve also been named the 2025 Consumer NZ People’s Choice Award winner for KiwiSaver.

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Partner with us generatewealth.co.nz/partner

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K i w iS av er

In this Issue

CONTENTS

MARY POTTER

Issue 2

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INVESTING FOR INCOME Investing options to generate income for clients has become extremely topical with strong market moves, new products and the introduction of a deposit compensation scheme. Jenny Ruth explains the changes.

Up Front

Features

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LEAD - THE NAME’S BOND

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LEAD – HOW THE NEW DEPOSIT COMPENSATION SCHEME GUARANTEES DEPOSITS.

16

LEAD – PUBLIC V PRIVATE DEBT.

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LEAD – FIXED INTEREST OPTIONS.

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EDITORIAL Income options open up.

NEWS What the Financial Markets Authority told its new minister.

KiwiSaver risk v returns over five years compared.

PEOPLE AIA distribution makeover; Ballantyne gets a new role; Wealthpoint Head of Investments; Ex-FMA boss chairs KiwiSaver provider; New FANZ chairman.

OUT AND ABOUT Pics and winners from the recent Wealthpoint conference.

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INVESTMENT ADVISER PROFILE Mary Potter celebrates a year of giving advice after nearly quarter of a century as a business development manager.

Regulars 28

INVESTMENT COMMENTARY David van Schaardenburg calls for NZ Super changes and offers some thoughts in the advice industry.

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RUSSELL HUTCHINSON Health systems problems and the impact on claims.

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MORNINGSTAR DATA Find out how hundreds of funds are performing

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GOOD RETURNS TOP 10 KiwiSaver stories have proved popular with advisers on Good Returns recently.

NEW TECHNOLOGY Urgent call: Start using AI now.

www.goodreturns.co.nz 3

For those who want to save and spend better Savvy’s the debit card linked to an investment account and smart app that combines your daily transactional account with a sweet return.

Learn more at boostersavvy.co.nz

Get Savvy on the Booster NZ App

* Current return rate before tax.

The Booster Savvy Scheme (‘Savvy’) is not a bank account and Booster is not a registered bank. Savvy is a managed fund and Booster Investment Management Limited is the manager and issuer of Savvy. Savvy’s Product Disclosure Statement, and other important information about Savvy 4 ASSET Issue 2 2025 (including a comparison highlighting some of the differences between Savvy and a bank account) is available at www.boostersavvy.co.nz.

Sponsored Content

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ooster Savvy* has returned $1 million in returns to its customers in just over 18 months, showing the benefits of an account that earns returns. Cha Ching!

For advisers seeking to provide a holistic planning solution, Savvy is a compelling proposition for their toolkit.

Booster Savvy is an investment account linked to a debit card allowing funds to be used for day-to-day payments and transactions. Funds held in the account earn a competitive return on every dollar - currently 3.25% - whilst also offering the flexibility to withdraw as and when required without penalty.

As of 3 June, those returns topped $1 million, delivering a significant boost to account holders. Savvy has proved popular with Kiwis, attracting nearly 6,000 customers who now collectively hold $50m in their Savvy accounts.

“This is a fantastic milestone for Kiwis who want their money to work harder for them,” says Booster Chief Executive Di Papadopoulos.

“A lot of people don’t think twice about where their transactional money is kept.

But when you consider how much money people keep in their ‘daily’ account that receives wages, and is used for paying bills, that can be significant.

The Reserve Bank says the average New Zealand household transaction balance at end November 2023 was $4,875**.

In a Savvy account, at the current rate, that could be delivering someone more than $150 a year (pre-tax), providing a meaningful contribution to their wider savings goals or daily expenses.

Booster launched Savvy as a way of helping New Zealanders grow their savings while managing their day-to-day spending. Savvy’s clever functions make it easy for users to see where their money is going and automatically save even small amounts of money toward goals.

Papadopoulos says people are using Savvy’s tools to great effect.

“By choosing to use our ‘Boost’ feature that rounds up purchases and saves the difference, Savvy customers have saved $141,000 so far. At the same time our ‘Sweep’ feature has been used to move $190,000 of unspent money towards savings goals.

“There’s a lot of scope for people to get more value out of their accounts – both in what they can earn, and what they can learn about the way they spend and save,” says Papadopoulos.

Savvy’s features give people nudges, insights and forecasts through: • Stacks – sub accounts that let users divvy up their money e.g.

Bills/Groceries/Savings • Salary Split – automatically splits the user’s salary payment across their stacks • Sweep – sweeps leftover cash from the last pay cycle into a Stack of choice, boosting savings • Boost – rounds up purchases to the nearest 50 cents, $1 or $5 and saves the difference to a chosen Stack. For example, if set at nearest $1 and a coffee costs $4.30, 70 cents is sent to the nominated Stack as savings

•

Goals – Savvy users can set savings goals and track them with visual information and receive insights and nudges on their progress.

Savvy was a finalist in the 2025 INFINZ Awards, Highly Commended in the international Banking Tech Awards and is MoneyHub Editor’s Choice for Favourite Debit Card.

“Savvy arguably redefines how we think about money management….It's a forwardthinking solution for those who want their money to work harder for them without sacrificing accessibility or ease of use.​” Money Hub. A

www.boostersavvy.co.nz *The Booster Savvy Scheme (‘Savvy’) is not a bank account and Booster is not a registered bank.

Savvy is a managed fund and Booster Investment Management Limited is the manager and issuer of Savvy. Find Savvy’s Product Disclosure Statement, and other important information about Savvy (including a comparison document highlighting some of the differences between Savvy and a bank account) at www.booster.co.nz/tools-info/ documents/booster-savvy-scheme. ** https://www.rbnz.govt.nz/-/media/project/ sites/rbnz/files/statistics/series/shared/s42-45-46/ stats-insight-bank-deposits-november-2023.pdf www.goodreturns.co.nz 5

Up Front

EDITORIAL

Income options open up Investing for Income is the theme of this issue of ASSET as it is such an interesting and topical topic with so much happening.

B

Something new(ish)

We all know what happened to finance companies when the Global Financial

Crisis hit. Investors’ savings were decimated not just by the market but by the dodgy nature of many of these firms.

As a result many directors and managers ended up in jail.

But there were good companies out there which have survived and are about to enter a new era. No longer are they finance companies; they’re now non-bank deposit takers. In reality they are much closer to banks with prudential regulation overseen by the Reserve Bank.

Soon the Deposit Compensation Scheme will kick in. This scheme guarantees the first $100,000 of funds invested in one of these companies.

(Remember there are also non-bank deposit takers operating outside of the scheme).

In essence the scheme i’s everything against investment theory. No longer is risk rewarded as the risk is close to zero for that first $100,000 invested.

The question which we haven’t found an answer to, is will financial advisers start adding NBDTs into portfolios; and will allocations of $100,000 be made across multiple NBDTs?

Head office and advertising

Design

ASSET is published by Tarawera Publishing Ltd (TPL).

TPL also publishes online money management magazine Good Returns GoodReturns.co.nz and TMM – The Mortgage Mag.

esides lots of new products and investment strategies, there is added colour to the Investing for Income picture with what’s happening in bond markets here and around the world.

If there is one lesson it is that bond markets are so powerful they can make politicians flinch when they propose stupid policies. Just think back to what happened to former UK Prime Minister Liz Truss.

When it comes to products, New Zealand advisers have a growing suite of Australian fund managers to choose from. Amongst this suite there are lots of different strategies on offer.

To illustrate how competitive the market is, J P Morgan entered the New Zealand market with a PIE fund earlier this year, ostensibly to take on the successful Hunter Global Fixed interest fund which is managed by another international giant PIMCO.

A return of non-bank deposit takers?

1448A Hinemoa Street, Rotorua PO Box 2011, Rotorua 0274377527 philip@tarawera.co.nz

Publisher

Philip Macalister

Publishing co-ordinator Alexa Whitehead

Photography Alisha Lovrich

Staff Writer

Kim Savage, Jenny Ruth

6 | ASSET SPRING | 2024

Michelle Veysey

Contributors

Russell Hutchinson, David Van Schaardenburg

Subscriptions

Alexa Whitehead P: 0274 377 527 E: subscriptions@tarawera.co.nz

Disclaimer All articles in ASSET are for information purposes only, the content is intended to be of a general nature, does not take into account any person’s specific circumstances, and is not financial, legal, or other advice. It is recommended you seek advice from a suitable expert before taking any action in relation to anything contained in this magazine.

A growing trend (fad?) is the rise of private credit. Indeed private assets are increasingly being embraced by fund managers, especially KiwiSaver providers.

A number of Australian fund managers who specialise in private credit, such as Metrics, have pulled significant sums of money out of the New Zealand market already. Locally, as we report, here and in Good Returns, Harbour Asset Management has added private credit to its offering.

We hope you enjoy this series of stories put together by Jenny Ruth.

Philip Macalister Publisher

All contents of ASSET Magazine are copyright Tarawera Publishing Ltd. Any reproduction without prior written permission is strictly prohibited.

ISSN 1175-9585

How to update your mailing address Make sure you don't miss an issue by changing your address.

Go to: tarawera.co.nz/coa

Up Front

NEWS

The Financial Markets Authority (FMA) says the Conduct of Financial Institutions (CoFI) regime “is essential” for it and that the licensing process is complete for most providers with supervision and monitoring work now underway.

The Financial Markets Authority (FMA) says the Conduct of Financial Institutions (CoFI) regime “is essential” for it and that the licensing process is complete for most providers with supervision and monitoring work now underway.

In response to commerce and consumer affairs minister Scott Simpson’s letter of expectations, FMA chair Craig Stobo says the regulator wrote to all relevant industry chief executives in April setting out its CoFI expectations and focus areas for 2025/26.

“The FMA’s focus is on addressing risks identified during the licensing period and focusing on financial institutions who have not previously self-reported issues regarding fair treatment of customers,” Stobo said in his letter.

The FMA also plans a broader consumer focus for 2026 and will expand its engagement with consumer groups “to ensure their voice is heard throughout our work,” he says.

“We will continue to prioritise work that builds confidence and integrity in the market and reduces harm to investors and consumers.”

Investigating misconduct and providing clear, practical guidance “continues to underpin our work,” Stobo says.

The FMA is “supportive” of removing unnecessary regulatory burden and to reducing barriers to entry.

‘To effectively implement an outcomesfocused approach, we will continue to expand our dialogue with industry and stakeholders,” Stobo says, noting the FMA‘s recent work with Financial Advice NZ “where we jointly considered a market review into access to financial advice” and that offers insights for a way forward, he says.

CoFI came into force from March 31.

The FMA is also in the process of taking over regulation of the Credit Contracts and Consumer Finance Act from the Commerce Commission and Stobo says a project is underway to manage the transfer of people and data and that respective agency leaders “engage regularly to ensure disruption is minimised and the anticipated changes in our operational functions are well supported.”

The FMA maintains “a close working relationship” with the Reserve Bank, the

CRAIG STOBO

FMA tells commerce minister CoFI is essential

prudential regulator of banks, non-bank deposit takers and insurance companies.

It will continue to collaborate with RBNZ on capital market changes and the Council of Financial Regulators, which the FMA co-chairs.

Stobo said it has initiated a review to evaluate the council’s effectiveness and to identify its future in enabling the better regulation of the financial system.

The FMA will also engage with financial entities at both board and operational levels to ensure the smooth commencement of the Contracts of Insurance Act 2024 to understand their needs and will provide feedback and guidance as needed.

It will also “boldly enforce breaches of financial markets regulation, subject to the constraints of the level of litigation funding, to prevent consumer harm and foster confident participation in financial markets.” A

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www.goodreturns.co.nz 7

MJW Investment Survey – March 2025 NEWS

22 April 2025

Up Front

While bond portfolios have been more strained in recent weeks, US Treasuries remained effective as a safe haven for investors in the March quarter. The yield on ten year US Treasuries, which was 4.58% at 31 December, remaining steady for the first half of the quarter before falling to 4.23% by 31 March.

Top ethical adviser award While the New Zealand Reserve Bank’s February shared announcement came and went with a 50 basis point cut

This is because the five year period now excludes the Covid-19 related nosedive in the first quarter of 2020.

So this time period has now traded a severely weak certification.

Spiller’s role in ethical quarter in 2020 for anpioneering only slightly weakinvestment one in 2025. was recognised and his continued dedication to

At an individual KiwiSaver Scheme deepening the practice of advice, bothlevel, for MoneyMilford the sector as a whole.

"Spiller The brings ASB, continues to Matters boastandimpressive results. rigour Schemes and a broader perspective Generate and academic SuperLife have also had an to ethical financial advice, drawing on his attractive return profile over recent years on a risk experience as a former Member of the Securities adjusted basis.

In theanddefault providers category, Commission, former Chairman of the New Fisher/Kiwi Wealth excelled over the pastand year.

Zealandhas Association of Investment Advisers

as per the consensus, New Zealand government bonds rates nevertheless trended slightly upward over the Mindful handed yield out itsrising from 3.94% to 3.99%. quarter,Money the five-year Financial Planners."

Of course, since the first quarter ended, volatility in annual ethical investment awards Ethical investment advice is a specialisation Infrastructure as a sector stood out so far this year, markets has and only increased.

Market reaction to recently with familiar nameshas taking focus for Money Matters.

Spiller’s clientout the top awards. delivering healthy returns in the troubled market Trump’s 2 April announcement was strongly centred approach provides tailored ethical negative. advice, with periodic reviews to retain later Awardprotected winners Carey Church and Rodger Spiller. conditions. stocks are fairly well from However, thereinvestment was a comparably strong rebound Mindful MoneyThese handed out its annual ethical integrity, report performance, and check tariffs on client were investment awards recently familiar namesslowdowns, being in trade issues andwith economic when the majority of the announced uses a framework of four Ps in documentation, investments and client fees, and taking out thelocally top awards. general regulated businesses and delivering “paused”. The status.

S&P Spiller 500 Index rose 9.5% on 9 April, the assessing funds – Purpose, Principles, Practices deep analysis of clients’ ethical preferences, goals The Best Ethical Financial Adviser this year was essential services.

However, this is perhaps also a eighth largest single day return recorded since the and Performance Measurement.

The framework and investment options. focused on the best financial adviser, rather than result of the general risk-off sentiment in markets, also index commenced in 1923. is communicated through a wider range of The judges particularly welcomed Carey’s the financial advisory firm, as in previous years. interviews, podcasts and webinars. seen in winner, the Carey dominance stocksabout the ethical and thoroughness in research Last year’s Church, sharedofthisvalue-oriented While this recentThe pause has provided certain amount judges appreciated Spiller’sadedication financial characteristics of potential investments, year’s award withtoRodger Spiller. compared growth stocks this quarter. of breathing space, thepersonal eventual resolution of these to improving and industry-wide including the use of innovative technologies and The judges were impressed by the depth enough, investors with higher policy policies is still unclear.

Measures of uncertainty knowledge, competence, and skill in raising the use of backcasting.

They also trade appreciated the ofPredictably research and rigour of client processes standards, through incorporation of thorough processes for matchingsuch clients to demonstrated Carey Church and will have had weights tobygrowth assets a disappointing asthethe VIX haveincluding calmed since the excitement of iwi perspectives and integration with academic most suitable portfolios.

Moneyworks.

The entry showed wellquarter. The median return from the growth KiwiSaver early April, but still remain well above normal levels. research. documented policies and processes, built around Church also plays a leading role beyond her funds in our survey was a loss of 2.8%.

Most of the With mounting threats of trade retaliations being The next issue of ASSET Magazine will have a four pillars approach: strong relationships client relationships, through active community funds in regular this group still have allocation to exchanged between theawards world’s largest economies, more on the and two responsible investing. with clients, communication and a respectable work and support for the ethical investment global bonds with (median: 9.3%) which helped to dull has theachievedour nearer-termA expectation is for volatility in markets knowledge-building clients, transparency in sector.

Moneyworks B-Corps pain of their share portfolios. Many of the more to continue. Investors who have a longer time horizon conservative KiwiSaver funds managed to avoid losses should remain mindful of this fact during these troubled this quarter entirely, with the median conservative fund times, reviewing their risk appetite, objectives and in our survey recording a small positive return of 0.1%. broader investment strategy as appropriate.

Comparing KiwiSaver Curiously, investors at all risk levels will have noticedreturns over five years – William Nelson, written 22 April 2025 The graph shows that returns are well banded in the various categories. One of the interesting points if there is quite a large, relative dispersion of returns in the Fisher/Kiwi Wealth has excelled. conservative category.

their improve in spiteSchemes of the turbulence MJWfive-year has trackedresult KiwiSaver risk versus have also had an attractive returns overfirst a five-year period. returninvestors profile overwith recent years on a risk over the quarter.

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WTW Alliance Partner

Up Front

OUT & ABOUT

Wealthpoint Winners

One of the biggest and most diversified financial advice groups, Wealthpoint, recently held its annual conference and awards in Napier.

The awards were by Wealthpoint Head of Strategy and Growth, Mark Nalder (left), and Chairman, Nigel Rukuwai.

The award winners were: • Emerging Business of the Year Reliable Brokers • Business of the Year - Mainland

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Insurance Mortgages and Investments Outstanding Contribution to Wealthpoint - David Gyde, Amicus Group Business Support Person of the Year -Michelle Miller, Stratus Financial Services / Core Advice Emerging Adviser of the Year - Peta-Lee Buckley, Wealthpoint Nelson Adviser of the Year - Tom Stanley, Amicus Group.

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PHOTOS: PAUL TAYLOR PHOTOGRAPHY 1. Mainland 2. Lee Moreton (Morris & Co Financial Advisers) and Shelley Moreton 3. Michelle Miller with Mark Nalder (left, Wealthpoint’s Head of Strategy and Growth), and Nigel Rukuwai (right, Chairman of the Wealthpoint Board) 4. Reliable Brokers 5. Peta-Lee Buckley 6. Nigel Rukuwai 7. One of the awards 8. Holly & Norman 9. Tom Stanley

www.goodreturns.co.nz 9

Up Front

PEOPLE

The latest appointments

AIA has rejigged its distribution team with the former head of IFA and group distribution, and head of aligned advice also leaving.

Long serving AIA and Sovereign, Anna Schubert, has left the company as has its and head of aligned advice, Jack Newman.

“Anna has been a part of our family for an incredible 29 years. In her time here at AIA NZ, and at Sovereign, she has led significant change and growth in the adviser distribution space," AIA chief distribution officer Angela Busby says.

"Her love for our industry is evident to all who know her, and we will miss her presence in the team,“ Busby says.

“Jack has spent almost 10 years at AIA NZ, and his dedication to our industry and his passion and belief in our purpose of Healthier, Longer, Better Lives has been of great value to our team.”

With their departure Hannah Anderson has been appointed as head of retail distribution, and Ben McQuay as head of corporate solutions.

“They are both highly experienced in business development and relationship management and have a strong track record of delivering great results for our advisers and distribution partners. I know their passion for our industry and their focus on growth will serve them well as they step into these roles,” Busby says.

Anderson joined AIA in 2021, beginning as a business development manager in Christchurch office, before stepping up to regional sales manager for the Southern region. Prior to joining AIA, she developed her expertise in business development 10 ASSET Issue 2 2025

and leadership through various roles at Les Mills, Air New Zealand, and CocaCola.

In her new role she leads a team of business development managers within AIA’s IFA, aligned advice, and home loans distribution channels.

McQuay has more than 13 years’ experience with the AIA NZ team, joining the organisation from his prior role at ACC. He has held various sales and business development roles, most recently as national sales manager – strategic accounts.

He leads the group insurance distribution team, supporting significant long-standing relationships with organisations across New Zealand, while identifying and establishing new opportunities for growth within this important distribution channel.

FINANCIAL ADVICE NZ APPOINTS NEW CHAIRMAN

TIUMALU PETER FA’AFIU

HANNAH ANDERSON

TWO OLD TIMERS LEAVE AIA IN DISTRIBUTION MAKEOVER

After four and a half years as chair, Heather Roy is stepping down from the Financial Advice NZ board.

Director Tiumalu Peter Fa’afiu, who has served two years on the board, has been appointed to the role of Independent Chair and continues to provide a consumer perspective to the board.

“It is now time for me to pass the baton to someone I know is going to take the association through its next phase,” Roy says.

“Peter’s time on the board has given him the experience and understanding of the particular nuances of the financial advice sector to lead the board into a new era. I wish him, the board, and the professional association every success in the future.”

Fa’afiu said he is looking forward to leading the association and continuing to champion the role of financial advice in New Zealand.

"I look forward to continuing to work with the board and support our chief executive Nick Hakes and his team in executing our strategic plan and strengthen our position in the community as an adviser-driven, high-engagement professional body,” Fa’afiu said.

“Now is a perfect time for building new pathways for Kiwis to obtain financial advice to help manage their financial wellbeing now and in the future.”

The board is advertising for a new independent director.

WEALTHPOINT APPOINTS NEW HEAD OF INVESTMENTS Andrew Couch has been appointed as Wealthpoint’s new Head of Investments.

He brings more than 30 years of global investment management experience to the role.

He has held senior leadership positions including Head of Global Equities at Investec Asset Management in London, Director at Newton Investment Management, and Founder of Salvus Asset Management in New Zealand.

Most recently, he was Head of Research for an independent adviser group, where he led investment strategy, asset allocation, fund manager engagement, compliance, and adviser education — supporting over $800 million in funds under advice.

Couch also brings significant governance experience, having served on boards of both listed and private financial services firms.

He succeeds Keri Jenkins, who has played a pivotal role in building Wealthpoint’s investment proposition and establishing a strong position in the market and is leaving Wealthpoint to focus on her organics business.

BALLANTYNE JOINS GENERAL INSURER Naomi Ballantyne has been appointed as an independent director of a general insurer.

Ballantyne is now an independent director of listed general insurer Tower, filling a casual vacancy.

FORMER MILFORD PORTFOLIO MANAGER JOINS ALVARIUM Alvarium and Pathfinder’s new CIO was previously a portfolio manager and deputy CIO at Milford Asset Management.

Alvarium and its sister company

FORMER FMA BOSS JOINS SIMPLICITY

DAVID LEWIS

Tower chairman, Michael Stiassny welcomes Ballantyne as a director; “Naomi has forged an impressive career, having founded, built, and led successful financial services companies for more than 40 years. This experience will be invaluable to Tower, as we continue to focus on our strategy to be the best direct personal lines and SME insurer in our selected markets.”

Ballantyne brings a wealth of experience and expertise in the financial services sector, particularly in the New Zealand insurance industry. Most notably, in 2023 Ballantyne sold Partners Life, the highly successful insurance company she founded in 2010.

A serial entrepreneur with both executive and governance skills, Ballantyne is currently the managing director of KNK Consulting, chair of insurance distribution group, TAP Group and a director of Dai-ichi Life Asia Pacific Limited – the regional office of International Life Insurance Corporation.

Prior to this, Ballantyne founded and was the managing director of Unique Solutions and Advice and ING Life (NZ) (now Chubb), and served as chief operating officer of Sovereign (now AIA) for 12 years. Her previous directorships include Accuro Health Insurance, Newpark Financial Services, Club Life, and New Zealand Superannuation Services.

Pathfinder has appointed David Lewis as its new chief investment officer.

Lewis has experience with large marketleading investment funds across multiple asset classes and is deeply committed to best practice sustainability, governance and values-based investing.

He was portfolio manager for the $3.5 billion Milford Diversified Income Fund and his extensive leadership experience includes supporting commercial and team growth for almost a decade at both Milford Asset Management and Bank of America.

He recently completed a Masters in Sustainability Leadership from Cambridge University, and his experience with research and non-profit work related to climate change makes him a natural fit to spearhead the investment strategy for both companies, Alvarium says.

He takes over the role from Wayne Ross, who as CIO has been building depth in the Alvarium investment team with a number of new hires over the past year.

Ross says: “We have been managing investment portfolios for Alvarium’s high net worth clients for over 20 years and I am confident that David will deliver outstanding outcomes which assist our clients to achieve their wealth objectives.”

Simplicity gets its number one pick for new chairman.

Rob Everett, the former chief executive of the Financial Markets Authority (FMA) and NZ Growth Capital Partners (NZGCP), has joined the Simplicity and will become its independent chairman from July 1.

He replaces Joy Marslin, who has been chair since 2016.

“We’re delighted to have someone of Rob’s calibre join our mission to give Kiwis more dignity in retirement,” she says.

“He has significant depth and breadth of industry experience and is a proven performer in both the FMA and NZGCP roles. The board and team couldn’t be happier that he’s joined Simplicity.”

Everett was FMA CEO for seven years and CEO of NZGCP from early 2022 until this year. He qualified as a lawyer with international law firm Allen and Overy in London, before spending 18 years with investment bank Merrill Lynch in London, New York and Hong Kong.

Founder and managing director Sam Stubbs says; “After almost nine years as chair, we’re sorry to see Joy leave a role she has mastered. But we couldn’t be happier that Rob is joining us.”

“He was our number one pick for the role,” he said.

“He’s a keen supporter of the English rugby team, so we will have to do something about that, but in all other respects he’s an awesome fit for a business that wants to be the big disruptor,” Stubbs says. A

www.goodreturns.co.nz 11

Lead

INVESTING FOR INCOME

“The name’s Bond”

12 ASSET Issue 2 2025

Like agent 007, bond vigilantes are pulling off mission impossible: the reigning in of Donald Trump, as they’ve done with leaders past.

BY JENNY RUTH

I

nvestors have faced an unprecedented amount of volatility in financial markets since US President Donald Trump took office on January

20.

But he’s proved just as subject to the discipline of the bond market as many a world leader before him.

Edward Yardeni, an Israeli-born American economist, coined the term “bond vigilante” in the 1980s to describe a bond-market investor who protests against monetary or fiscal policies by selling bonds, pushing up yields.

Trump declared April 2 as “Liberation Day” and announced swinging tariffs on all goods imported into the US, ranging from a minimum 10% to 50% - meant to take effect from April 9.

On April 1, the US 10-year Treasury bond had ended trading at 4.156%.

Initially, it fell to 3.886%, but then the bond vigilantes turned out in force and it jumped almost as high as 4.592% by April 11, while the US dollar plunged - down more than 7% against the New Zealand dollar year-to-date.

That’s the opposite market behaviour we normally see in times of economic trouble. Usually both the US dollar, still the world’s reserve currency, and US Treasuries are regarded as safe-haven assets.

This reaction very obviously spooked Trump, who suspended all tariffs above 10% for 90 days with the exception of China, on which he escalated tariffs to 145% before he and Chinese President Xi Jinping agreed a truce.

The taco trade Trump also started a trade war with its two largest trading partners, Canada and Mexico, in violation of the US-MexicoCanada Agreement (USMCA) free-trade pact which Trump himself had negotiated

during his first term in office.

Since April, it’s been hard to keep up with Trump’s tariff announcements and market reaction has been diminishing, because soon after he announces a scandalously high tariff on some country or type of imports, he then suspends them, which financial markets are now calling “the taco trade,” short for Trump always caves.

We’ve yet to see how all this ends, but US bond yields have continued to climb, with the 10-year hitting 4.6% on May 21 but was at 4.46% in early June.

Shaken and stirred Trump is far from the first world leader to be forced to change policy by the bond vigilantes.

George Soros is often referred to as “the man who broke the Bank of England” (BOE) when he challenged nonsensical monetary policy in the Northern Hemisphere summer of 1992 and won.

Soros pocketed at least £1 billion after betting his entire US$5 billion hedge fund and another US$10 billion of borrowings on the central bank’s inability to hold the British pound.

Britain’s Government, then led by John Major, was committed to the European exchange rate mechanism (ERM), the precursor to joining the euro, which meant Britain needed to keep the British pound within defined ranges against the currencies of the other intending euro participants.

The problem was that the British economy was weak but the German economy, two years into reunifying East and West Germany, was booming.

Logic would have dictated that the BOE should have been cutting interest rates to stimulate Britain’s economy, but instead it was raising rates to try to prevent the pound from falling because capital was

fleeing Britain for the better investment prospects in Germany.

Soros didn’t believe the ERM could hold and he was right. When the rest of the market cottoned on to what Soros was up to, others joined the pile-on.

When the BOE finally gave in by September, 1992, the pound plunged 15% in a day – some years later it emerged that the BOE had spent £3.14 billion on trying to defend the currency.

The great bond massacre US President Bill Clinton was the next leader to feel the wrath of the bond vigilantes when US 10-year Treasury yields climbed from 5.2% to just over 8% between October 1993 and November 1994. Clinton had taken office in January 1993.

Called the “great bond massacre,” it was sparked by concerns about government spending, and forced Clinton a) to abandon his spending plans, and b) to reach agreement with the first Republican-led Congress in 40 years on a plan to reduce the deficit.

This was successful and bond yields fell to about 4% by November 1998.

Clinton’s political adviser, James Carville, is famous for saying that if he could be reincarnated, he’d like to come back as the bond market.

“You can intimidate everybody,” said Carville.

Readers will probably remember the famous lettuce that lasted longer than former British Prime Minister Liz Truss’ term in the top job, after the bond vigilantes came out in force to trounce her government budget plan.

Her 49 days in office made her the shortest-serving prime minister in Britain’s history. A www.goodreturns.co.nz 13

Lead

INVESTING FOR INCOME

Will investment behaviour change now deposits are safer?

Investors’ capital will be protected under the new deposit-compensation scheme starting soon. Jenny Ruth looks at alternatives to fixed-term deposits - and whether the new guarantee will impact investment decisions.

W

hile the Government’s deposit compensation scheme (DCS) comes into force from July 1, it may take longer for investors to get their heads around the implications for their investment decisions.

They’ll need to sort out which investments are covered: basically all bank term deposits and deposits offered by the non-banks.

Other similar-seeming products, however, such as Booster’s Savvy, and Wedge’s on-call fund, are not in the DCS. Squirrel’s on-call product is in the DCS, but its portfolio investment entity (PIE) managed funds are not.

Massey University banking professor David Tripe, who is also a director of Gold Band Finance, says the DCS will be “one of the largest changes to New Zealand’s financial system in some time.”

How it works Administered by the Reserve Bank, the prudential regulator, the scheme guarantees up to $100,000 per depositor in each bank or other entity covered by the DCS. This means someone wanting to deposit more than $100,000 can spread their funds across different institutions to ensure all are covered.

Tripe says most depositors will no longer have to worry about the quality and safety of the institution with which their funds are lodged.

“Having deposit guarantees of this type is generally good for a country’s financial stability, although the design of some countries’ systems is better for promoting financial stability than others,” he says.

More than 110 countries have DCSs, with the US adopting the first one in 1934, and almost all are underwritten by national governments.

Ours will be, too, although the institutions belonging to New Zealand’s DCS will pay fees that are expected to take about 20 years to make it sufficiently 14 ASSET Issue 2 2025

funded to pay for any required use.

Tripe expects non-banks won’t need to offer as high interest rates to attract funds because of the DCS, although they will probably still pay more than the banks - because their fees for belonging to the DCS will be higher.

He points to the experience of the temporary deposit guarantee scheme the New Zealand Government implemented in the wake of the GFC, and says the spread between rates offered by non-banks and the banks contracted dramatically and settled at about 50 basis points.

That probably won’t be the case for deposits above $100,000, where rates offered are likely to remain much the same as before the DCS.

collapsed.

Brennan is clear about Gold Band resisting such pressure: “We don’t have to take deposits.”

Either it could just not accept deposits, he says, or offer below-market interest rates to slow the inflow of funds.

Leading up to the DCS beginning, Brennan says Gold Band has seen a significant influx of deposits of less than $100,000, which he surmises shows depositors are expecting to be covered by the scheme; historically, most of Gold Band’s deposits have been above $100,000.

He notes Gold Band has never offered the highest interest rates in the market, but it has never struggled to attract inflows.

‘There’s something like $250 billion sitting in New Zealand bank savings accounts and term deposits’ Dave McLeish Licensing to take time Gold Band chief executive Martin Brennan says he knows his company’s deposits will be covered by the scheme, but that the licensing process, which will set requirements for equity, liquidity and other metrics, is expected to take a couple of years.

“We’re effectively being grandfathered in,” Brennan says.

“Obviously, the Reserve Bank is aware of how all the non-banks are trading, because they already regulate us.”

Brennan says he was working at Westpac when the temporary scheme was instituted, seeing money flood into the non-bank sector. This put pressure on these institutions to put the money to work in loans, leading to very poor lending decisions - one of the reasons why so many finance companies subsequently

Gold Band is in the process of applying for an account with the Exchange Settlement Account System (ESAS), which means RBNZ will pay it whatever the official cash rate is at on surplus funds.

Currently, Gold Band has to lodge such funds with a trading bank which charges a fee on that money.

The biggest difference having an ESAS account will make? Currently Gold Band has to provide equity of 20% of riskweighted assets to support the liquidity lodged with a trading bank, but it won’t have to provide any capital for money in its ESAS account.

This means its costs will become more competitive relative to the banks, increasing its ability to lend.

One check on lending is that both the non-banks and banks will continue to have to meet RBNZ’s equity requirements against their lending.

The DCS: ‘one of the largest changes to New Zealand’s financial system in some time’ Professor David Tripe

Convincing advisers

Cash & on-call options

Brennan says in the past he’s “failed miserably” at convincing financial advisers to include Gold Band deposits in the products they recommend to clients.

Given advisers’ clients will have their capital protected by the DCS, and Gold Band’s interest rates will still be higher than the banks’ offer, Brennan is wondering whether this will make a difference to advisers’ recommendations.

The guarantee will mean that credit ratings become irrelevant when the sums invested are $100,000 or less.

Makao Investments managing partner Noah Schiltknecht doesn’t have great news for Brennan.

His firm provides wholesale advice to financial advisers, who rely heavily on it in building portfolios.

“Term deposits come with illiquidity – you lock your money up for a certain period of time,” Schlitknecht says. “A lot of the funds our clients use have better liquidity.”

While maintaining yield in a falling interest-rate environment is a key issue at the moment, Schlitknecht says a lot of clients’ portfolios have significant allocations to offshore assets.

Shorter-term interest rates in the US are significantly higher than in New Zealand, with the Federal Reserve’s funds rate at 4.5% and RBNZ’s OCR at 3.25%.

“Global diversification really helps,” he says.

A number of New Zealand cash funds and on-call options provide useful alternatives to term deposits.

Squirrel’s on-call account, covered by the DCS, is currently offering 3%, compared with Gold Band’s six and nine months offers of 3.75% and their four or five-year offer of 5.8%.

Squirrel chief executive David Cunningham notes that the “pass-through” arrangements it has for that account are both covered via the BNZ and Westpac DCS coverage, because they hold the call account funds on trust, which means up to $200,000 is covered by the DCS, less any funds customers have in deposits directly with those two banks.

Squirrel’s managed funds and term investments aren’t covered by the DCS and have achieved reasonable returns – the monthly income fund has achieved 7.18% a year in the last three years – although there are no guarantees future returns will match historical returns.

Cunningham says Squirrel now originates all its loans included in its managed funds or peer-to-peer term investments – it has about $350 million in such loans currently, having recently passed the $1 billion mark of loans it has originated.

Originally, Squirrel had relied on thirdparty distribution, but has seen 1000% growth since taking over origination itself, he says.

Squirrel’s brokers place about $3 billion a year in mortgages with banks, and it

expects to lend $600 million-plus through its own platform in the year ahead.

Wedge’s new PIE fund, which isn’t covered by the DCS, was founded by Dave McLeish, formerly head of fixed income at Fisher Funds, and is targeting “lazy money” currently sitting in bank-transaction or low-interest savings accounts and term deposits.

“There’s something like $250 billion sitting in New Zealand bank savings accounts and term deposits,” he says, adding that’s about twice the size of the KiwiSaver market.

McLeish is aiming to create a globally diversified portfolio of “AA”-rated fixedincome assets and cash, aiming at very short-term duration of no more than about 40 days and to achieve competitive returns.

He’s hoping this will be the first of many products.

Among the other offerings now available is Booster’s Savvy product, which was launched about 18 months ago. The company says it’s paid out more than $1 million in returns so far to its nearly 6,000 customers, who hold about $50 million in their accounts.

It’s an investment account linked to a debit card and an app that allows clients to make day-to-day payments and transactions while earning interest on their balance – its current interest rate is 3.25%.

“At Booster, we understand people work hard for their money and we want their money to work hard for them,” says Booster chief executive Di Papadopoulos. A www.goodreturns.co.nz 15

Lead

INVESTING FOR INCOME

Open doors: the privatecredit alternative

P

rivate credit used to be an asset class available only to institutional investors, but more retail versions are now starting to come to the

market.

The fund managers offering this alternative to investments such as bonds in publicly traded markets and term deposits are still emerging in New Zealand, but a number of Australian private credit options are available to retail investors.

Essentially, the fund managers operating in the private-credit space have capital to lend to businesses and act as an alternative to borrowing from banks.

Generally, the sector targets smaller businesses that don’t have the size to be able to access the bond market.

And the capital comes from investors who want to access the generally higher interest rates that such lending can generate, but who also need to realise that it comes with more risk than is usually associated with buying a bond - and certainly much more risk than buying a term deposit from July 1, when the government guarantee of deposits up to $100,000 kicks in.

You only need to look at the interest rates the banks offer businesses to realise that private credit does offer the possibility of higher returns: BNZ is probably New Zealand’s most businessfriendly of the four major banks and it’s currently offering business term loans at 5.27%, plus a margin that will reflect its assessment of how risky the loan is.

By contrast, BNZ’s standard two-year fixed home loan is 4.95%.

Big investment class It’s become a very big investment class in Australia – according to Morningstar, about A$11 billion flowed into privatecredit funds in the year ended March, compared with just over A$4 billion into global bonds.

Not surprisingly, the Australian Securities and Investment Commission is starting to ramp up its oversight of private-credit managers, given the increasing retail distribution and its concern about what might happen should a manager’s loan go sour.

16 ASSET Issue 2 2025

We should therefore expect the Financial Markets Authority will also take an interest in the sector.

Aotea Investment Management claims to be New Zealand’s first domestically owned and operated private-credit manager, and a number of the smaller KiwiSaver managers are starting to devote small allocations to it.

However, Harbour Asset Management stuck its toe in the market about seven years ago and has just spun it out as a separate fund, at this point for institutional investors only.

Harbour’s new vehicle, which had accounted for about 7% of the Harbour Income Fund, includes 93 loans, which have delivered a consistent cash rate plus 4% over seven years, which means the manager has a track record to offer.

Harbour director and senior credit analyst Simon Pannett says his company sticks to the more conservative end of the

international Basel rules, created the opening for private-credit managers.

“I do believe there will be continued demand from investors to access the asset class,” Lockhart said, adding that he isn’t seeing any shortage of capital.

His firm closed a A$315 million wholesale bookbuild at the end of May; it has also offered ASX-listed funds since 2017.

Because of the changing banking rules, banks are a lot less interested in providing warehousing facilities and securitisation, providing new opportunities for privatecredit managers, Lockhart said.

Metrics isn’t just offering to lend to the smaller end of town. It is also involved in private equity deals, and has just announced it will take an undisclosed equity stake in the A$290 million development of a luxury apartment building on the Gold Coast.

‘I do believe there will be continued demand from investors to access the [private-credit] asset class’ Andrew Lockhart

market, with most of its loans being to businesses with the equivalent of a “BB+” credit rating – these businesses don’t have credit ratings, so that’s Harbour’s assessment of their quality.

Harbour also takes security and is never the first in line to lose money should loans go sour; Pannett says arrears to date have been modest.

Across the ditch Metrics Credit Partners is one of the larger and more established Australian operators with about A$20 billion in funds under management.

Managing partner Andrew Lockhart told a recent Morningstar conference in Sydney that the global crackdown on banks since the GFC, and the new capital requirements imposed by the

Lockhart told the conference that with about 85% of the companies Metrics lends to, it’s participating alongside banks - and that borrowers appreciate the ability to diversify their sources of loans.

He’s expecting greater demand for asset lending - an area Simon Pannett is also eyeing for growth.

Lockhart said he isn’t concerned about ASIC’s increasing scrutiny, saying the regulator does need to ensure that managers are compliant with the law; he said ASIC’s focus is more on governance than looking at individual loans.

“There’s always going to be investment risk. The issue is where is that risk and is it properly explained,” Lockhart said, adding that ASIC wants to ensure the disclosure private-credit managers are providing is appropriate. A

Lead

INVESTING FOR INCOME

Fixed-interest options in public markets when yields drop

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When interest rates fall, how can investors maximise yield without sacrificing the safety of fixed interest?

ith interest rates falling again in New Zealand, thoughts are again turning to how to maximise yield without sacrificing the safety that fixed interest usually represents.

Interest rates are unlikely to go anywhere near as low as they did during the covid pandemic, but the Reserve Bank has already cut the official cash rate (OCR) from 5.5% to 3.25% since August last year.

It’s possible that could be the low for the current cycle, but the central bank has a couple more cuts pencilled in and economists are expecting further cuts – for example, ASB’s chief economist is expecting the OCR trough at 2.75%.

Nikko Asset Management’s head of bonds and currency, Fergus McDonald, manages a portfolio worth a little above $6 billion, invested in New Zealand bonds and cash.

He is limited to buying tradeable securities in the New Zealand debt market, including NZX-listed debt securities, and they have to be investment-grade, which means having credit ratings of “BBB” or higher.

McDonald has the OCR low pencilled in as 2.75% and expects it to get there by the end of this year.

“In general, bank term-deposits tend to follow the direction of the cash rate and in all likelihood returns are going to be coming down rather than going up in the next 12 months,” McDonald says.

Term deposits were a good option when the OCR was at 5.5% and banks will always want to fund a lot of their balance sheets with them, so they’re likely to continue to offer reasonable rates of return – but probably lower than current rates.

All options come with trade-offs McDonald said investors have four avenues available if they want to maintain yield, but they all come with trade-offs which may or may not be acceptable to individual investors.

“They can go down the credit spectrum: the lower the credit quality, the higher the return because the probability of default increases,” he says.

Alternatively, investors can opt for longer duration. Longer-term investments

usually offer higher returns: in the first week of June, government bonds maturing April 2027 were yielding 3.42%, the bonds maturing May 2030 were yield 9.37%, while the bonds maturing May 2035 were yielding 4.6.

1. Term deposits Banks don’t usually offer term deposits longer than five years.

“You can get the same credit quality, but, because of uncertainty about where interest rates are going to go over the next five years, that uncertainty is priced in,” McDonald says.

2. NZX Bank bonds Another option is to buy a bank bond listed on NZX – ANZ, for example, was offering 4.15% on five-year deposits in early June, but its NZX-listed bond maturing in September 2031 was yielding 5.08% on market.

This option generally provides a higher yield while also posing very low risk of default.

There is some risk: if interest rates rise, the value of the bond would fall, “but it looks like a better bet than sticking with term deposits,” McDonald says.

ANZ also has NZX-listed preference shares, which rank below its bonds and therefore offer higher yields still – the preference shares with a 6.95% coupon were trading at $1.04 per $1 of face value in early June.

‘NZX bank bonds: ‘Looks like a better bet than sticking with term deposits’ Fergus McDonald 3. Government bonds For those who are “more adventurous,” government bonds are something to consider. Given the Government has been running large fiscal deficits, it has to sell lots of bonds and so the yields are likely to remain reasonably attractive, McDonald says.

“It takes away the credit risk, but you’re still getting a reasonable yield.”

4. Corporate bonds The more adventurous still might consider listed corporate bonds – Auckland International Airport, for example, has a number of different bonds on NZX, and those maturing in November 2029 were yielding 4.4% in early June.

Infratil also has a number of different bonds listed: the one maturing December 2027 was yielding 5.95%.

Riskier companies generally offer higher yields – Fletcher Building, for example, has a bond maturing in March next year which is trading at 8.15%.

But rather than buying individual bonds, investors would be better to invest in one of the many fixed-interest or bond funds which best suit their needs while providing a broader range of different bonds which also offer the ability to buy or sell on a daily basis if the investor changes his mind or the economic environment changes.

Fund which are also Portfolio Investment Entities (PIEs) also provide tax advantages: those on a higher marginal tax rate have their tax liability capped at 28%, while those with lower tax rates are taxed at whatever that rate is.

5. High-yielding equities McDonald says the fourth option, which is considerably riskier, is to invest in high-yielding equities, something many investors were forced into during covid because the yields from term deposits, bonds and other fixed-interest securities were so low.

“That may be a step too far for some people,” McDonald says.

He points to phone company Spark as an example of a stock which used to be high yielding but was forced to cut its dividend when its balance sheet came under pressure.

Prices of equities can be volatile and that can lead to loss of capital: Spark shares have dropped from as high as $4.48 in August last year to as low as $1.945 in March. The shares ended May at $2.23. A www.goodreturns.co.nz 17

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FISHER FUNDS

Where to turn now TDs have lost their shine

By Benjamin Wilton, Fixed Income Analyst at Fisher Funds

A

fter two years of high term deposit (TD) rates, many investors have grown accustomed to returns of 5-6%.

However, as central banks shift their focus from controlling inflation to supporting economic growth, interest rates—and consequently TD rates—are now falling.

Today, many one-year TDs are hovering in the 3-4% range, and even five-year TDs with the banks are generally below 4.5%. This marks a clear turning point for income-focused investors and advisers are increasingly hearing clients ask, "What's the alternative?"

We believe actively managed funds can be an attractive alternative. As an example, the Fisher Funds Managed Funds Income Fund provides access to a broader range of fixed income assets, greater flexibility, enhanced liquidity, and professional risk management— advantages that TDs simply can't match.

TDs have had their moment TDs served their purpose during a unique rate environment, offering elevated income with minimal duration or credit risk. But that opportunity set is shrinking quickly.

As rates decline, clients risk rolling shorter-term deposits into materially lower yields. Bonds, on the other hand, benefit in this environment. With starting yields still elevated, bonds purchased today could see further upside if interest rates continue to fall. So for clients who are willing to take on a little more risk in their investments, with the aim of achieving higher returns over the mid to long term investing timeframe, managed funds holding fixed income assets may be a great option to consider.

From fixed terms to flexibility For clients moving on from TDs, flexibility becomes critical — especially in an environment where rates, markets, and personal needs can change quickly.

Unlike term deposits, which lock up capital for fixed periods, our Income Fund is priced daily meaning quick withdrawal processing and offers daily liquidity.

Clients can redeem units at any time, without penalty. This provides a level of control that’s critical when balancing liquidity with income needs. Although it’s important to note our current recommended investment timeframe for 18 ASSET Issue 2 2025

the Income Fund is 4 years, and like all funds is subject to volatility.

At the same time, our portfolios are diversified across a range of maturities.

That allows us to structure income (which is then reinvested into the fund) more deliberately — avoiding the constant reset of short-term deposits and aiming to offer more consistent outcomes through the cycle.

to lower liquidity, which is why we incorporate them within a diversified strategy.

At Fisher Funds, these opportunities are available to us because of our scale and on-the-ground investment team. The income potential for the Income Fund from these types of securities available today is meaningful — without the need to reach too far out the risk curve.

Poised to act when opportunity strikes

A measured way to step beyond TDs For many clients, stepping beyond cash can feel like stepping into unknown territory — particularly when the words "duration" or "credit" are mentioned.

While fixed income assets do carry more risk than TDs and see both ups and downs, the idea that you need to take excessive risk in more speculative areas to earn a better yield is not always the case.

We’re finding compelling opportunities in areas that strike the right balance between return and capital preservation, including: • Investment-grade bonds from wellestablished local and global issuers.

• Select High Yield bonds — subinvestment grade bonds where we see strong fundamentals, and valuations reflect attractive compensation for risk.

• Capital notes — debt instruments with equity-like features, issued by major banks and well capitalised corporates. They typically offer better yields than traditional bonds, with lower volatility than equities.

• Private market deals — such as direct lending arrangements with well-known New Zealand and Australian businesses that offer attractive returns not typically found in listed markets. These higher returns come in part due

Another benefit of active management is being able to take advantage of volatility. When markets shift unexpectedly, short windows of mispricing can emerge — but they’re only valuable if you’re ready to act.

Following the recent Liberation Day tariff announcement, global credit spreads spiked briefly. We moved quickly, adding high-quality issuers from our watchlist — bonds of companies with solid fundamentals, but where valuations hadn’t previously stacked up. These moments last as little as a few days, but when you’re prepared and have the mandate to act, they can materially enhance portfolio returns.

Built for this moment — and the next In a shifting environment, active management is more important than ever. At Fisher Funds, we remain focused on identifying high-quality fixed income opportunities — leveraging our scale, credit expertise, and hands-on portfolio management to access assets beyond the reach of most individual investors, from global High Yield bonds to carefully selected private credit — all with a clear aim of achieving consistent income and preserving capital.

By striking the right balance between risk and return, we offer a measured, disciplined way to move beyond term deposits and into an Income Fund built to perform not just in today’s market, but through the full cycle. Additionally, all our diversified funds in the Fisher Funds Managed Funds have exposure to fixed income assets and reap the benefits set out above. A Fisher Funds Management Limited is the issuer of Fisher Funds Managed Funds. A Product Disclosure Statement is available at fisherfunds. co.nz. Past performance is not necessarily an indicator of future performance. Returns are not guaranteed and can be positive or negative.

In uncertain times, trust is the greatest currency.

At Fisher Funds, we’re helping over 500,000 Kiwis grow and manage their wealth across every kind of market condition. For more than 25 years we’ve delivered active, expert investment management. And it’s why we’re proud to be New Zealand’s most trusted KiwiSaver provider.* Our Partnerships team is here to support you in achieving your clients’ ambitions.

Call us today on 09 941 5946 or email partnerships@fisherfunds.co.nz

David Buell General Manager Growth

Shannon Murphy Senior Manager Intermediary

Fund your ambition

Amanda Ng Business Development Lead

Laura O’Reilly Business Development Lead

Neil Prakesh Intermediary Support Specialist

fisherfunds.co.nz

*Reader’s Digest Most Trusted Brand (as voted by New Zealanders) for KiwiSaver 2021, 2022, 2023, 2024, 2025. Fisher Funds Management Limited is www.goodreturns.co.nz 19 the issuer of the Fisher Funds branded managed investment schemes. PDSs for the Fisher Funds branded retail schemes available at fisherfunds.co.nz.

Feature

AI

Urgent call: start using AI now It’s one thing to know AI is a gamechanger for the advice industry, but what to do about it, preferably yesterday, is another. ASSET writer Kim Savage gives her take - without AI’s help - on the technology seminar at the Financial Advice New Zealand annual conference.

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s the meeting-room lights dim, there’s the odd yawn – not surprising given it’s the afternoon session on the second jam-packed day of Financial Advice New Zealand’s annual conference.

But the minute David Greenslade, of Strategi fame, takes the mic and starts sharing his thoughts on AI’s role in the future of advice, he has the room’s attention.

“When we're talking about 2030, we're talking less than five years away,” says the industry stalwart.

“So what we're talking about today is what all of us should have on our business plans right now. Or… we should [at least] be thinking about how we're actually going to get there.”

By “there”, Greenslade means a business where technology is responsible

20 ASSET Issue 2 2025

for taking care of repetitive processes, allowing advisers to focus on the crucial aspects of the job.

“What AI actually does is enables humans to talk to humans. It enables you, as the adviser, to spend well over 50% of your time - way over, hopefully - face-toface, talking with clients,” he says.

“The same with your staff: your human collateral is there to engage and talk with clients, not to push keyboards and do basic admin stuff.”

For example, an AI agent can be directed to call clients, organise appointments and deliver disclosure documents.

“The client is given a secure portal, [where] they've got the ability to sign and to give authority for you, the adviser firm, to scrape the client's data.”

This will be made possible, says Greenslade, with the help of open

banking, which allows clients’ bankaccount data to flow freely into an adviser’s CRM, or customer relationship management platform.

The adviser meets with the client; AI then compiles a summary from the meeting recording, running a compliance check as well.

If the AI agent has access to further information about the client, it can even go as far as producing a Statement of Advice.

Multiple agents needed Five years ago, Jason Venu started his South Auckland-based advisory firm Coversure with an unusual target market: the uninsured.

AI entered the mix a few years later, evolving at breakneck speed and forever changing the world in which we live and

‘The technology is so good, clients can’t tell “Jess” is a bot, not a human.’

Jason Venu

do business.

Venu began experimenting with AI agents: software applications which can work towards and achieve an outcome, based on parameters set by a human.

Agents, or “bots” as they are sometimes called, are the closest AI has come so far to mimicking human-like labour.

According to CEO Venu, it has been a journey of discovery for Coversure.

As he tells the seminar crowd, he found there was no one agent which could do it all.

“If we [overload it], it will start to hallucinate; it will start to create its own truth,” says Venu.

“So during the first six months of beta testing, it was saying ‘No, no, this is how it should be done.’

“We identified that by breaking [instructions] up into smaller tasks, the chances of hallucinations were significantly less.”

The firm operates six AI agents in its business, each with its own job to take care of.

“Jess” follows up leads and sets up appointments. The technology is so good, says Venu, clients can’t tell “Jess” is a bot, not a human.

Humans remain critical So why even bother having real people in the team? Alongside recommending bots as tools, Venu is careful to emphasise the importance of good hiring.

Coversure has human staff based in New Zealand and the Philippines.

“One thing that an AI bot cannot do is convey empathy, and that's why we're still growing the business with real people who [not just] display empathy, but actually genuinely have it, who have a genuine care for clients,” says Venu.

Having the right mix of human and AI ‘workers’ removes the limit on the number of clients a business can handle, he says -

good governance and oversight, says David Greenslade.

In fact, expect to see compliance become even more important to the advice process, as more jobs are outsourced to AI tools.

“What is our due diligence around AI technology? How is the data stored?” he asks.

“Because wherever we store data, whatever AI we use, it's got to meet the same standards as if we were doing this in-house. This is where compliance would evolve.

“Do you have an AI policy? And then how do you know AI is giving advice equivalent to what a human with a Level 5 certificate would have?”

Your job? Build trust As well as keeping tabs on AI agents and their activities, advisers of the future will need to focus on building and maintaining trust-based relationships with clients, something they already do.

Technology allows for advisers to be generalists or to continue to specialise, but they will have to continue to

‘Your human collateral is there to engage and talk with clients, not to push keyboards and do basic admin stuff’ David Greenslade especially for sole operators.

“What we found is the use of technology could allow one-man-bands to scale their client bases significantly more, so you don't have to be limited to X amount of clients.

“Now you can grow, because you can add more agents.”

Keeping bots in check While AI agents can tell you when you’ve missed a step in your compliance process, they are not a replacement for

prove their worth to the market, says Greenslade.

“You've got to be able to demonstrate to the world how you are the professionals, and why dealing with an absolute professional in that area is the way to go,” he says.

“If you think about the medical world, it's like going to a cardiologist or orthopaedic surgeon. Or you could be going to a GP practice, which is like what a generalist is. But at the end of the day, they are all trusted professionals.” A www.goodreturns.co.nz 21

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MERCER

A decade of investment insights: lessons from Mercer’s ‘Periodic Table’ Mercer examines the key trends and outcomes of the decade, exploring how diversification and asset allocation feed into strategies for optimising returns.

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A long-term perspective

s we reflect on the past decade, it is clear that the investment landscape has experienced substantial changes, influenced by a wide range of economic, geopolitical, and technological factors.

Mercer’s ‘Periodic Table’ of investment returns serves as a valuable tool for understanding the varied performance of different asset classes throughout this period.

In this article, we examine the key trends and outcomes of the decade, exploring how diversification and asset allocation feed into strategies for optimising returns.

most part asset classes rank from those exhibiting greater volatility to those with less, with commodities being a notable exception. However, the path to these outcomes is far from predictable. Certain asset classes have frequently delivered strong performance, but not consistently, highlighting the importance of a wellstructured investment strategy.

Mercer’s Periodic Table of Investment Returns is an annual report that ranks the performance of 16 major asset classes over the previous 10 years. It uses a colour-coded format to illustrate the returns of each asset class and highlights how different asset classes have performed. The scattering of colours underscores the absence of consistent trends and emphasises the principle that "higher risk frequently results in higher reward”.

As can be seen with the 10-year average performance figures, for the

Key trends over the decade Looking back over the last decade, a number of key themes have dominated markets:

welcome to brighter

Mercer periodic table of annual investment returns Best

Market Indices * 2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

NZ Equities

Commodities (H)

Emerging Market Equities (UH) 34.6%

Global Private Equity (IRR)(H) 18.2%

NZ Equities

Global Private Equity (IRR)(H) 14.9%

Global Private Equity (IRR)(H) 48.4%

Commodities (H)

Global Equity (UH)

Global Equity (UH)

23.7%

34.1%

NZ Direct Property

Global Equities (UH) 26.9%

NZ Equities

Global Listed Property (H)

Global Equities (H)

NZ Direct Property

13.4%

Global Small Cap Equities (UH) 13.8%

Global Listed Infrastructure & Utilities (H) 13.3%

NZ Equities

Global Private Equity (IRR)(H) 13.7%

NZ Direct Property

Global Small Cap Equities (UH) 20.3%

NZ Equities 6.0%

26.7%

12.0%

Global Equities (UH) 13.2%

Global Private Equity (IRR)(H) 11.3%

Global Equities (H)

NZ Government Bonds 4.6%

Global Small Cap Equities (UH) 25.4%

Global Equities (H) 11.2%

NZ Direct Property

Global Equities (H) 10.8%

Global Equities (UH) 20.0%

NZ Cash

11.9%

2.0%

Global Listed Infrastructure & Utilities (H) 23.7%

11.7%

11.1%

23.6%

20.2%

15.3%

Global Small Cap 13.4% Equities (UH) 22.2%

Global Private Equity (IRR)(H) MSCI Burgiss iQ Global Private Equities Benchmark (After Fees) (NZD, Hedged), 12 months to 30 September

Hedge Funds (Defensive) (H) 6.1%

Global Equity (H)

NZ Direct Property 4.3%

Global Small Cap Equities (UH) 15.6%

Global Small Cap Equities (UH) Emerging Market 11.1% MSCI World Small Caps Net (NZD, Unhedged) Equities (UH) 21.5%

Commodities (H)

NZ Cash 2.2%

Australian Equities (UH) 13.0%

Global Equity (H)

26.3%

Emerging Market Equities (UH) 10.9%

Global Equities (H) 24.1%

Australian Equities (UH) -0.1%

Emerging Market Equities (UH) 9.7%

Emerging Market NZ Equities 10.0% S&P/NZX 50 with imputation credits Debt (UH) 14.7%

Global Small Cap Equities (UH) 8.7%

Global Small Cap Equities (UH) 21.7%

Emerging Market Debt (UH) -1.1%

Global Listed Property (H)

9.4%

Australian Equities (UH) 14.3%

Australian Equities (UH) 9.1% S&P ASX 200 (NZD, Unhedged)

Global Listed Infrastructure & Utilities (H) 17.0%

Global Private Equity (IRR)(H) -1.5%

Emerging Market Debt (UH) 7.5%

Global Listed Infrastructure & Utilities (H) 12.9%

NZ Direct Property 8.6% MSCI/PCNZ Property, 12 months to 30 September Emerging Market Equities (UH) 7.1% MSCI Emerging Markets Net (NZD, Unhedged)

29.0%

23.0%

21.4%

Global Small Cap Equities (UH) 10.7%

Australian Equities (UH) 18.4%

Global Bonds (Aggregate) (H) 1.8%

NZ Government Bonds 5.4%

NZ Equities 10.1%

Global Private Equity (IRR)(H) 16.3%

Emerging Market Debt (UH) -0.3%

Global Listed Property (H)

21.4%

Global Equities (UH) 8.6%

Global Bonds (Aggregate) (H) 4.4%

Emerging Market Debt (UH) 9.7%

Global Listed Infrastructure & Utilities (H) 15.7%

Hedge Funds (Defensive) (H) -1.2%

Emerging Market Equities (UH) 17.7%

NZ Government Bonds 5.4%

Australian Equities (UH) 16.2%

Global Listed Infrastructure & Utilities (H) -3.9%

Global Bonds (Aggregate) (H) 6.6%

NZ Equities

Global Equities (H)

5.6%

Global Equities (UH) 13.7% MSCI World Net (NZD, Unhedged)

Global Equities (UH) 28.1%

14.6%

Australian Equities (UH) 22.5%

Global Listed Property (H)

12.2%

Global Equities (H) 10.8% MSCI World Net (NZD, Hedged)

Australian Equities (UH) 9.2%

Emerging Market Debt (UH) 13.0%

Global Listed Infrastructure & Utilities (H) -1.3%

Emerging Market Debt (UH) 13.1%

Global Bonds (Aggregate) (H) 5.4%

NZ Direct Property

4.2%

NZ Government Bonds -9.1%

NZ Government Bonds 5.4%

Global Private Equity (IRR) (H) 6.4%

Global Listed Infrastructure & Utilities (H) 6.7% FTSE/EPRA NAREIT Developed (NZD, Hedged)

Australian Equities (UH) 4.1%

Emerging Market Equities (UH) 9.2%

NZ Direct Property

Global Equities (UH) -3.2%

NZ Direct Property

Australian Equities (UH) 4.3%

Hedge Funds (Defensive) (H) 4.3%

NZ Equities

NZ Cash

NZ Cash

-11.3%

5.4%

5.6%

Emerging Market Debt (UH) 4.5% JP Morgan GBI-EM Global Diversified (NZD, Unhedged)

NZ Cash

Global Listed Property (H)

Global Listed Property (H)

Global Listed Property (H)

Global Private Equity (IRR)(H)

Hedge Funds (Defensive) (H) 3.7%

Emerging Market Equities (UH) 2.5%

Global Equities (UH) -11.4%

Global Private Equity (IRR) (H) 3.8%

NZ Government Bonds 4.7%

Global Listed Property (H) 3.2% FTSE/EPRA NAREIT Developed (NZD, Hedged)

Global Bonds (Aggregate) (H) 7.5%

NZ Cash

Emerging Market Debt (UH) 1.2%

Global Bonds (Aggregate) (H) -11.7%

NZ Equities

Commodities (H) 3.5%

4.4%

Hedge Funds (Defensive) (H) 2.7% HFRI FOF Market Defensive (After Fees) (NZD, Hedged)

Emerging Market Debt (UH) -5.1%

NZ Cash 0.4%

Global Small Cap Equities (UH) -12.1%

Global Listed Infrastructure & Utilities (H) 0.4%

Hedge Funds (Defensive) (H) 4.2%

NZ Equities

Emerging Market Equities (UH) -13.5%

Hedge Funds (Defensive) (H) 0.2%

NZ Direct Property

Global Listed Property (H)

3.4% Hedge Funds (Defensive) (H) 2.3%

Worst

31.6%

15.1%

10-Year Average Return (% per annum)

6.8%

Global Bonds (Aggregate) (H) 5.8%

10.0%

8.5%

NZ Government Bonds 5.5%

-3.7%

Global Equities (H) -7.1%

10.1%

9.4%

0.6%

14.0%

Global Listed Infrastructure & Utilities (H) -0.1%

Global Equities (UH) 5.6%

Global Bonds (Aggregate) (H) 4.0%

Australian Equities (UH) -7.2%

Commodities (H)

Emerging Market Equities (UH) -2.9%

NZ Government Bonds 3.4%

Hedge Funds (Defensive) (H) 3.0%

Global Small Cap Equities (UH) -8.6%

NZ Government Bonds 4.9%

Commodities (H) -5.6%

0.2%

Emerging Market Debt (UH) -5.2%

Hedge Funds (Defensive) (H) 3.2%

Commodities (H)

Emerging Market Equities (UH) -9.4%

NZ Cash

Global Bonds (Aggregate) (H) -1.2%

Global Equities (H)

NZ Direct Property

1.7%

Global Listed Infrastructure & Utilities (H) -6.5%

-17.6%

-2.1%

Commodities (H)

NZ Cash

NZ Cash

Commodities (H)

Hedge Funds (Defensive) (H) 1.6%

Global Listed Property (H) -13.6%

NZ Government Bonds -6.2%

Global Listed Property (H) -24.0%

-22.8%

2.5%

2.5%

2.0%

-11.6%

6.2%

Commodities (H) -8.2%

3.8%

3.5% Global Bonds (Aggregate) (H) 3.0%

NZ Cash 2.6% S&P/NZX 90-Day Bank Bill Global Bonds (Aggregate) (H) 2.4% Bloomberg Global Aggregate (NZD, Hedged) NZ Government Bonds 2.3% S&P/NZX NZ Government Bond Commodities (H) 1.0% Bloomberg Commodity (NZD, Hedged) *

22 | ASSET ISSUE 2 | 2025

All indices are gross of fees with the exception of Hedge Funds (Defensive) and Global Private Equity, which are net of fees.

1.

2.

3.

Equity market resilience Equity markets have demonstrated remarkable resilience, particularly in the United States. The S&P 500 Index has delivered substantial returns, driven by strong corporate earnings and technological advancements. Notably, the rise of major technology companies has significantly influenced market dynamics, with sectors such as artificial intelligence and cloud computing leading the charge.

Global diversification The importance of global diversification has been underscored by the varying performances of international markets. In recent times, equity markets have become increasingly concentrated in a few large stocks which have disproportionately influenced overall market movements, particularly in the US. While US equities have thrived, other regions, such as Japan and emerging markets in Southeast Asia, have also shown robust growth, particularly as they recover from economic disruptions. This highlights the benefits of allocating investments across different geographies to capture growth opportunities.

Fixed income evolution The fixed interest market has experienced a notable evolution over the decade, with interest rates fluctuating in response to changing economic conditions.

Investors have seen varying returns from government and corporate bonds, with emerging market debt emerging as a standout performer

4.

5.

due to improved credit ratings and economic outlooks. In a higherinterest-rate environment, investors can employ flexible strategies that capitalise on opportunities from across the risk spectrum; for example, by investing in high-quality government securities while also strategically allocating a portion to high-yield and private debt.

Real estate and alternative assets The property sector has faced challenges, particularly in traditional office spaces, as remote work trends reshape demand.

However, alternative real estate assets, such as healthcare and logistics, have thrived, driven by long-term demographic trends and technological advancements.

Real estate is approaching the tail of its most recent correction and this has the potential to provide historically attractive entry pricing for assets. Given the heterogeneous characteristics — different regions offer highly differentiated opportunity sets — global real estate offers opportunities for a range of different investment exposures.

Commodities and volatility Commodities have presented a mixed bag over the decade, with significant volatility within specific sectors. While precious metals have generally performed well, agricultural commodities have faced challenges. This underscores the importance of understanding the underlying factors driving commodity prices and the potential for diversification within this asset class.

Conclusion In an ever-evolving market environment, what should investors do? One could spend hours analysing the Periodic Table in search of patterns — whether real or illusory. Alternatively, a more prudent approach is to focus on structuring portfolios to withstand various market conditions while keeping an eye on longterm outcomes. This latter approach tends to yield the most rewards.

For many investors, a successful approach involves understanding one’s investment horizon, recognising risk tolerance, and embracing the benefits of diversification across asset classes. The journey may be fraught with challenges, but those who remain steadfast in their strategies and embrace a diversified approach will enhance their chances of achieving their financial goals.

For further information visit the Mercer website www.mercer.com/en-nz. A

Who is Mercer Mercer is part of Marsh McLennan, a global leader in professional services focused on risk, strategy, and people. With a dedicated team of over 20,000 employees across more than 130 countries, we are passionate about shaping the future of work, enhancing retirement and investment outcomes, and promoting genuine health and well-being.

We work with professional investors of all sizes worldwide, to help navigate investment risks, uncover opportunities, and implement bespoke strategies that align with their unique goals. By harnessing our latest thinking and insights and extensive research, we empower you to make informed decisions that pave the way for success.

www.mercer.com/en-nz The information contained in this article is intended for general guidance only and does not take account of the investment objectives, financial situation and/or particular needs of any person. Before making any investment decision, you should take financial advice as to whether your intended action is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee or indicator of future performance.

Copyright 2025 Mercer (N.Z.) Limited. All rights reserved.

Periodic Table of Investment Returns Which asset classes performed the best (and worst) over the past 10 years, and what does that tell us about the roles of diversification and patience in designing investment strategy?

Scan the QR code to find out A business of Marsh McLeannan

www.goodreturns.co.nz 23

Features

INVESTMENT ADVISER PROFILE

BDM-turned-adviser’s one regret Mary Potter left ANZ Investments after 25 years to become a financial adviser and says her only regret is she didn’t do it sooner.

24 ASSET Issue 2 2025

S

ince Mary Potter made the switch to become a financial adviser, she’s had a number of people ask her whether she wishes she had done it earlier.

The answer, she says, is yes.

Potter is known to many in the industry as a business development manager at ANZ Investments, but became a financial adviser with Milestone mid last year.

She said the prospect of moving was a bit daunting to start with.

It meant leaving the comfort, security and leads of the bank environment, but the change had already paid off.

Work was coming in much more quickly than she expected, and she had both the Milestone network for support, and the wider advice community. “They’ve been really supportive… in Christchurch the advisers were coming up and saying ‘are you enjoying it, are you enjoying it’. If I get stuck I can ring the advisers I know and say ‘I know you know the answer to this…’”

Potter started her career as a chartered accountant but moved into the financial services sector in the early 1990s.

“I had applied for an accounting position back in Whangarei, but it wasn’t quite the right fit. The accounting partner suggested I speak to his wife, who was a financial planner, as she needed someone,” she said.

“Financial advice was completely new to me and I loved it.”

While she was working there, she was approached to move to Auckland and become a BDM at Norwich Investments.

“They were launching a new range of unit trusts. I was there for five years but decided to look elsewhere as the company was sold to Royal and Sun Alliance and was going through a major restructuring.”

In 1999, she joined Armstrong Jones as northern BDM. “Over the next 25 years I collected numerous business cards as the business evolved—first to ING, then OnePath, and eventually ANZ Investments—but my role remained focused on working closely with external advisers. Through that, I developed a real understanding of their businesses and saw firsthand the passion advisers have for achieving great outcomes for their clients.

“I kept up with my professional development and completed the Massey Diploma and AFA requirements. I was a facilitator for Sorted and was a member of the Retirement Commission’s working group that created the De-jargoning Money Glossary. I’ve been actively involved with the industry bodies over the years.”

She said becoming a financial adviser was something she had thought about for a long time.

“Over the years, friends and family would often ask me for advice on KiwiSaver and investments, but I couldn’t

help them directly.”

But she really enjoyed her role at ANZ so it was not an easy thing to leave.

“I loved the team at ANZ, working with people like Trisha Edmonds. We just had such a good culture there, that’s why I was toing and froing on ‘do I take the leap to become an adviser’ when I was actually comfortable doing what I was doing.”

But after she reached a milestone, she decided it was time to make a change.

“I did 25 years and the next day said to Trisha ‘yep that’s it, I’m going to make the jump’. She said ‘I’m so jealous, that’s one regret I have always had that I never did that.”

Potter said over the years she had a number of advisers tell her that she should get in touch if she ever wanted a career change.

She had known the Milestone team “forever” and they knew she wanted to move to Hamilton, where her husband was. “There was no way he was going to move to Auckland…I realised if I didn’t make the change now I probably never would.

‘It’s working out well and I’m happy doing what I’m doing, working for Milestone’ “The timing was perfect.

Milestone needed someone to open a new office in the Waikato/Bay of Plenty region.

“It’s working out well and I’m happy doing what I’m doing, working for Milestone. I’ve been amazed at how busy I’ve been. The advisers within Milestone and the wider industry have been incredibly supportive of my transition, and it’s been a smooth move into advising.”

She said she now wished she had made the move sooner.

“I’m now able to help friends and family, and I’m also receiving referrals from accountants who previously didn’t know who to turn to.

“I've joined a women's networking group and have been asked to be their main speaker next month. I’m also visiting workplaces to educate staff about KiwiSaver and the basics of saving and investing. I love seeing people empowered with basic financial knowledge and watching their confidence grow.”

She said she had been surprised by the number of people who needed advice but did not know where to find it.

“Many feel overwhelmed, especially as they approach retirement.

“There’s still a lot of confusion about KiwiSaver too — it’s surprising how many

people still don’t know their provider or what fund they’re invested in.”

She said she had built her client base by getting out and chatting to people about things like KiwiSaver and their wider investment needs.

“I’m doing quite a bit of work in Whangamata, we’ve got a bach over there and probably spend most weekends there.

I thought with Waikato ‘there’s enough advisers and sharebrokers and everyone else there, why don’t I look at the Whangamata-Coromandel area?’ I know a couple of accountants and my lawyer is here and they said they never knew who to refer people to so I’m starting to get referrals now.

“For me I want to do the best I can for the next few more years, try to help as many people as I can.”

Speaking to groups is not new for Potter, who used to help advisers run seminars.

“It’s just that basic financial education, knowing you can make a difference to people whether they’re young kids and you’re putting them on a journey to buy a first home or people at the other end who are close to retirement and starting to panic about whether they have got enough.”

She said advisers had the benefit of being able to go through a checklist with clients.

“You can go and ask questions their lawyer may not know – is your will up to date, have you got an during power of attorney? It’s talking about your own life experience as well, storytelling, which I really enjoy as well. Keeping it simple while making a difference.”

Potter said she was impressed by the positive vibe at a recent financail adviser conference she attended.

She said she had also seen other people make a shift from a private bank environment to advising, and flourish “There’s certainly a lot of new faces there I hadn’t seen before. I thnk it’s exciting, it really is. For me talking to people and talking about the value of having an adviser, the difference we can make, as well… I’m very positive about the future for advice.

“If I wasn’t I wouldn’t have gone on to the other side.”

Organisations such as Financial Advice NZ, the Financial Services Council, the Retirement Commission and FMA were all working together for a common purpose, she said.

“Everyone out there is trying to help New Zealanders. Everyone is working together rather than against each other to try to make a difference.” A

www.goodreturns.co.nz 25

Sponsored Content

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26 ASSET Issue 2 2025

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1

www.goodreturns.co.nz 27

Regulars

INVESTMENT COMMENTARY

Carrot and Stick David van Schaardenbug tells politicians it’s time to get serious about super; plus he gives some thoughts and observations on the advice sector and innovation.

BY DAVID VAN SCHAARDENBURG

T

he latest Budget reinforces my dismal opinion of the current crop of politicians who appear focused on short term wins to fit within our short three year electoral cycle without sufficient consideration of the longer term impacts of their actions.

New Zealand, like other relatively developed nations, has an aging population trend which is accelerating due to the baby boom and has being followed by decades of declining birth rates. Unlike other relatively developed nations (read most of Europe East and West) during the 21st century New Zealand has made minimal progress in enhancing the affordability of the state pension.

The most powerful lever being increasing the age of entitlement for NZ Superannuation.

In 2001 the age of state pension entitlement in New Zealand was 65. At that time the average life expectancy at birth was estimated to be 78.69 years.

Nearly quarter of a century later, in 2025, life expectancy has increased to 83.1 years yet the age of pension entitlement hasn’t moved a jot.

This lack of political courage is increasing the risks that we have another ‘mother of all budgets’ where retirement income policy dramatically changes for the negative (the stick) over a short term period like we saw in the 1990s.

28 ASSET Issue 2 2025

Ultimately New Zealand, like other countries with an aging population, is going to have to make the choice between a well-funded state health system, which benefits the whole population, or a generous state pension framework which benefits only those over a certain age.

On the carrot side of the equation, during the 21st century New Zealand has made some progress in building retirement income preparedness via the voluntary KiwiSaver scheme and building up the NZ Superannuation Fund.

However the numerous carrots available at KiwiSaver scheme launch in 2007 to support participation in KiwiSaver have been progressively whittled away to now in 2025 being solely centred on many, but not all, KiwiSavers having a lower PIE tax rate on their investment income than their income tax rate. Add to this the Swiss cheese approach to KiwiSaver members continuing their scheme contributions with the increasingly use of total remuneration employment contracts.

Simply, retirement income policies need to be developed so they are effective over a 20-plus year time horizon and not tinkered with based on the three year electoral cycle view.

Credit is due to the late Sir Michael Cullen for taking this approach. No credits due to National-led governments

in place since 2008.

Economies of scale In my industry interactions I regularly hear people talk about the need for their businesses and the industry as a whole to achieve better economies of scale… which in time will lead to lower pricing for the end customer.

Economics 101 tells us that consumption levels increase when there are lower prices. So which comes first for the New Zealand investment and advice industries – higher revenues (read profitability) or lower prices.

The enhanced regulatory environment we’ve had since 2016 has led to more and better quality disclosures on pricing both for fund managers and financial advisers.

Financial literacy is rising. However interpersonal relationships and marketing (the triumph of illusion over reality) still play an oversize role in winning business.

We presently have in New Zealand examples of wealth management groups who have grown rapidly in an organic sense principally led by a low price/low cost structure strategy and also those who have grown successfully (size and or profit wise) while charging premium prices. The latter is understandable when there has been delivery to expectation or more on the returns front but this has not been always the case.

Two reasons appear to be the case.

‘Simply, retirement income policies need to be developed so they are effective over a 20-plus year time horizon and not tinkered with based on the three year electoral cycle view.’

David van Schaardenburg

First, some groups have grown mainly by acquisition - they’ve bought their clients, not won them. Second, there exists disclosure anomalies between market participants. For example some fund managers do not participate in funds management ‘league tables’.

In addition the disclosure requirements for returns and fees for DIMs licence holders are not as rigorous and standardised as those with MIS licences nor do they feature in publicly available comparison tables like Sorted or Morningstar.

Congratulations to those market participants achieving and passing on the benefits of economies of scale.

Time to look deeper at improving the required cost, risk and return disclosures for DIMs providers.

Innovation and Competition Let’s end on a positive note. I continue to be thrilled by the extent of technological and business innovation (and business risk appetite) in our industry.

Let’s give a few examples of where I observe this to be occurring (why have most of these started outside of Auckland?); Hatch, Sharesies, InvestNow, Kernel, FNZ, Adminis, Consilium.

These are by no means the only successful groups in our industry but they are notable for their relative degree of business innovation, client focus and harnessing of technology.

Recently I was told that the New Zealand wealth and advice industries were not nearly as competitive as in

Australia. This might provide some temporary comfort to industry laggards or resisters to change. However with more offshore fund managers active in New Zealand, new offerings being developed and innovative organisations such as the above, competition will only get fiercer.

Time for all of us to either take the next step up, or seek to gracefully exit.

PS: In relation to my previous article in ASSET, it’s ironic that I’m drafting this latest article on June 6 – D Day…the day 81 years ago that Americans, amongst others, risked and many lost their lives commencing the battle for Europe’s freedom. How times change. A David van Schaardenburg is independent of any fund manager and is CEO of the Ignite Adviser Network… whose FAPs provide advice to more than 15,000 investment clients.

Lifetime Home.

Turn your home’s equity into steady income.

To find out more, give us a call today on 0800 254 338 or send us an email at retire@lifetimeincome.co.nz lifetimeincome.co.nz

The income you want for the retirement you deserve.

www.goodreturns.co.nz 29

Regulars

PRACTICE MANAGEMENT

Health system problems and the impact on claims

BY RUSSELL HUTCHINSON

A

IA chief executive Nick Stanhope, speaking on a panel at the IFAA conference late last year said that he was concerned about the performance of the New Zealand health system – and, he felt, the consequential rise in claims for health insurance.

Since then, the news can hardly have improved. We have heard from senior managers at each health insurers and they all back up the view that the public system is under pressure, and there has been a sharp rise in health claims.

Southern Cross, which released its results on the September 30 last year, reported that in 2019, 33% of its members claimed, whereas in the year to June 30, 2024 that rose to 50% of members.

The year-on-year rise was 15% in dollar value of claims. Once again, recent news from advisers suggest that will have risen again, significantly.

The extent of the rise in claims surprised us, even though we had predicted a big surge back in our review in September 2022 – and we were told at the time that our estimate was high. We agreed we thought it was high. Yet now it looks conservative.

We were right about the general trend, but thought the pressure would come sooner.

30 ASSET Issue 2 2025

What are the possible reasons for this, and if they change or abate, can we expect to see reductions in claims again?

Statistics New Zealand, when assessing public trust in key institutions, found that the drop in trust in the health system between 2021 and 2023 was the worst of half a dozen institutions considered – except for the drop in trust in parliament.

There is lower trust in the media, but that typically has a lower rating in any event. The health system usually scores strongly – something has clearly changed.

The sharp decline in confidence comes at the same time as unprecedented levels of investment. With government expenditure on health at about 8.5% of GDP. Our per capita expenditure is roughly on a par with the more elderly Japan, and slightly ahead of South Korea.

Although there are other examples: we spend about 10% less than the UK per head, and about 20% less per head than Australia. This spend has risen by more than a quarter in real terms in the last five years.

The extra money has brought some gains. Improvements continue to be made in reductions in hazardous drinking, in smoking, and child mortality rates and overall, life expectancy rates are like European numbers.

‘I have no way to predict whether these will work, but I am not betting on rapid change.’

Russell Hutchinson

‘Fraud is most likely to affect income and mortgage protection but may be seen in health claims too.’

Yet people do not trust the health service, and they are using private insurance at higher rates than ever before, although we cannot be completely sure that those two statements are linked, you would be forgiven for assuming that they are.

It may be small consolation, but this is not unique to New Zealand, health systems are under pressure across the western world. The pattern seems to be very much like ours: increased spending, higher use levels, problems accessing GPs, higher use of intensive care (Covid-19 is still seriously affecting large numbers of older people) and higher use of emergency rooms.

Management, it seems, may count.

Those of us that know the investment banker’s mantra that the top three things that determine success for a company are ‘management, management, management’ will not be surprised. Both our current and previous government agreed there is a problem. The previous government’s attempt at structural reforms is being replaced. I have no way to predict whether these will work, but I am not betting on rapid change.

Comparisons with other markets show that staffing problems may be a big factor in the overall challenge across the developed world. These are not easy to fix. Even so, we do not appear to be

leading the battle for talent, or have immigration settings that are very supportive of hiring goals.

In this office we are collectively betting on slow improvement.

In the very short-term cost of living pressures combined with poor economic conditions are likely to continue to lean in the direction of increased claims costs.

A small portion of increased claims costs are likely to be fraud, which is also associated with tougher economic conditions.

Fraud is most likely to affect income and mortgage protection but may be seen in health claims too.

Even if, after a time, the public system improves either a little or a lot, how that affects claims is another matter.

Unfortunately, it does not necessarily follow that, all the clients making increased demands on their private insurance would naturally switch back to the public system.

There are some features in private health insurance to encourage clients to make better use of public systems, but unless the products are changed, these are limited, and so likely to have little effect.

The single largest is the excess. Already that has grown over the last 10 years, and the most common level of excess selected on Quotemonster is now $500, but the

level of use of larger excess amounts – from $1,000 to $10,000 has risen significantly in the past year.

Sub-limits are a deeply unpopular form of limitation, according to experts such as Phillipa Green, of Canopy Cancer Care.

These are already present, and the effects of inflation have made them more limiting.

Cost management tools such as approved provider networks and purchasing arrangements are already employed to some extent – but will doubtless get more focus.

We think that there are other aspects of product design which could be explored. In the absence of a return to the patterns of the past it is unfortunate, but most likely, that price will do the work: pushing some out of the private health insurance market, and thereby forcing their complete dependence on the public system. A Russell Hutchinson is a Director of Quality Product Research Limited.

References: Trust in the health service - https://www.stats. govt.nz/news/new-zealanders-trust-in-keyinstitutions-declines/ OECD comparisons for health spending – https:// www.health.govt.nz/about-us/new-zealandshealth-system/vote-health/health-expendituretrends Inflation adjusted spending on health, per capita –https://ourworldindata.org/grapher/healthexpenditure-and-financing-per-capita?facet=non e&country=JPN~ITA~DEU~GBR~KOR~NZL~A US~FRA Health survey results - https://www.health.govt.nz/ news/latest-new-zealand-health-survey-resultsprovide-valuable-information-about-the-healthand-wellbeing Why health-care services are in chaos everywhere - https://www.economist.com/finance-andeconomics/2023/01/15/why-health-care-servicesare-in-chaos-everywhere www.goodreturns.co.nz 31

Regulars

Latest 1Yr 3Yr 5Yr Transaction Return Return Return Exit price %

Size $M

Morningstar Rating Overall

AMP KiwiSaver Cash AMP NZRT Cash ANZ Default KiwiSaver Scheme-Cash ASB KiwiSaver Scheme's NZ Cash

1.7712 1.78295 1.7407 1.7864

4.52 4.50 5.19 4.85

4.27 4.26 4.85 4.65

2.56 2.56 3.14 2.94

106.43 81.75 38.44 903.73

-----

BNZ KiwiSaver Cash Fund

1.3985

5.11

4.78

3.03

353.94

--

Booster KiwiSaver Enhanced Cash Fisher Funds KiwiSaver Plan Cash

1.7625 --

3.95 4.83

2.46 3.19

87.26 432.00

Fisher TWO KiwiSaver Scheme-Presv

3433.73986

4.58

2.73

47.36

Mercer KiwiSaver Cash Milford KiwiSaver Cash Fund NZ Defence Force KiwiSaver Cash OneAnswer KiwiSaver Cash Fund SIL Cash Plus Fund SIL Cash Plus Fund Summer KiwiSaver New Zealand Cash Westpac KiwiSaver Cash Fund

-1.16464 -1.6807 2.6508 2.6508 1.2052 1.6977

4.54 5.42 5.21 -5.05 -5.18 4.98 4.98 5.23 5.39

-4.79 -4.85 4.63 4.63 4.66 4.94

-3.07 -3.14 2.92 2.92 2.83 3.23

34.57 168.88 3.85 89.30 1.67 1.67 3.58 677.31

------------

2.02 0.73

4.95 2.82

8.67 34.56

3 2

2.03 6.01 6.01

4.90 11.63 11.63

8.15 17.32 17.32

1 3 3

-2.16 -0.40 ---0.91 -0.25 -2.44 0.12 -2.44 0.12

1.57 -2.02 4.04 4.04

9.38 11.65 24.96 18.41 18.41

1 -2 4 4

Name

NZ Insurance Cash

NZ Insurance Equity Region Australasia AMP NZRT Australasian Shares 2.06101 OneAnswer KiwiSaver Australasian Share 2.774

3.05 -0.98

NZ Insurance Equity Region Australia AMP KiwiSaver Australasian Shares Summer KiwiSaverAustralian Equities Summer KiwiSaverAustralian Equities

1.6931 1.9708 1.9708

3.01 3.73 3.73

NZ Insurance Equity Region NZ Fidelity Life NZ Shares Portfolio Fidelity Life Super-Super NZ Share SIL New Zealand Share Fund Summer KiwiSaver New Zealand Equities Summer KiwiSaver New Zealand Equities

9.0763 -8.3632 1.7084 1.7084

NZ Insurance Equity Region World Mercer KiwiSaver Sustainable Shares NZ Defence Force KiwiSaver Shares OneAnswer KiwiSaver Intl Share OneAnswer KiwiSaver Sustainable Int Shr SIL International Share Summer KiwiSaver Global Equities Summer KiwiSaver Global Equities

--3.6688 4.816 7.0328 2.1667 2.1667

------4.16 8.15 10.03 8.72 11.91 14.80 4.20 8.27 10.16 9.08 10.93 7.95 9.08 10.93 7.95

66.99 36.59 75.32 57.05 11.31 40.89 40.89

2 2 3 5 3 2 2

NZ Insurance Equity Region World - Hedged AMP KiwiSaver International Shares AMP KiwiSaver International Shares No. 2 AMP NZRT International Shares AMP NZRT International Shares No. 2 Booster SuperScheme High Growth Port Fidelity Life International Fidelity Life Super-Sup Intl Fisher FuturePlan - Intl Coms

2.387 2.5365 2.97413 3.08803 -4.4725 -5.73903

11.44 11.50 11.64 11.53 -5.16 -4.22

10.47 10.57 10.72 10.65 -8.04 -7.43

12.50 12.62 12.71 12.76 -9.79 -10.00

26.12 41.80 26.55 43.87 89.07 3.43 25.96 30.54

4 4 5 5 -2 -3

4.63

7.29

3

NZ Insurance Equity Sector Global - Real Estate OneAnswer KiwiSaver Intl Property

1.6823

9.48

-3.15

NZ Insurance Equity Sector NZ - Real Estate MFL Property Fund OneAnswer KiwiSaver Australasian Prpty Summer KiwiSaver Listed Property Summer KiwiSaver Listed Property

5.5155 2.1648 1.2523 1.2523

3.79 -6.53 -6.17 -6.17

-2.65 -6.95 -6.07 -6.07

4.83 0.12 0.67 0.67

360.51 18.35 7.86 7.86

4 2 3 3

1.0675 1.26793 1.7807 1.1391 1.1391

5.71 5.76 5.84 5.76 5.76

1.13 1.15 1.21 2.48 2.48

-0.95 -0.83 -1.21 1.34 1.34

1.46 1.55 2.56 1.20 1.20

2 3 2 4 4

AMP KiwiSaver International Shares No.3 1.4156 Booster KiwiSaver Capital Guaranteed 1.3 Booster KiwiSaver Geared Growth 4.0025 Fisher Funds KiwiSaver Plan CashPlus -SBS Wealth KiwiSaver Income 1.18068

13.78 5.31 5.51 5.91 --

-0.30 5.90 6.80 4.48 2.66 86.53 7.06 10.45 546.14 4.11 1.76 107.60 --- 253.80

------

7.22 5.20 7.03 6.64 8.16

3 1 3 4 5

NZ Insurance Global Bond AMP KiwiSaver Global Fixed Interest AMP NZRT Global Fixed Interest OneAnswer KiwiSaver Intl Fxd Int Summer KiwiSaver Global Fixed Interest Summer KiwiSaver Global Fixed Interest

NZ Insurance Miscellaneous

NZ Insurance Multisector - Aggressive AMP KiwiSaver Aggressive AMP KiwiSaver Growth No.2 AMP NZRT Agressive Booster KiwiSaver High Growth Booster KiwiSaver Socially Rsp Hi Gr

2.574 1.698 5.33822 2.6645 3.346

32 ASSET Issue 2 2025

8.39 6.32 8.22 4.55 6.04

8.48 6.12 8.47 8.67 9.44

895.51 39.52 420.80 811.17 713.08

Name

Latest 1Yr 3Yr 5Yr Transaction Return Return Return Exit price %

Fisher TWO KiwiSaver Scheme-Eq 8483.13085 4.33 Generate KiwiSaver Focused Growth 2.8912 7.02 Fund Mercer KiwiSaver Sustainable High --Growth Milford KiwiSaver Aggressive 1.7443 4.59 NZ Defence Force KiwiSaver High Growth --SBS Wealth KiwiSaver High Growth 2.10432 --

Morningstar Rating Overall 324.44 4 Size $M

7.08

9.65

9.34

9.03 3738.33

4

--

--

390.38

3

7.98 ---

11.23 2177.76 -63.66 -- 428.00

5 3 --

5.81 5.79 5.12 4.93 5.69 5.66 4.91 4.98 3.32 3.32 6.52 6.34 4.84 5.45 -4.13 6.02 4.57 5.36 4.35 -4.60 6.28 -3.31 4.83 4.83 5.25 5.49 4.32

5.74 6.41 4.64 5.38 5.74 6.46 5.21 4.63 4.62 4.62 6.42 5.62 5.45 5.60 -4.32 6.30 4.90 5.72 5.30 -5.58 8.47 -4.62 4.81 4.81 5.73 5.81 4.65

1240.08 30.21 938.52 40.85 831.42 9.86 115.24 270.00 259.64 3578.38 3967.50 914.02 825.73 381.58 249.96 5.71 2354.17 118.27 1758.69 56.46 635.49 120.42 1822.63 116.59 625.28 126.48 126.48 99.62 2194.70 61.92

3 4 2 3 3 4 3 2 2 2 4 4 3 4 -2 4 3 4 3 3 3 5 2 2 2 2 4 4 2

4.15 3.71 4.72 4.45 4.90 3.89 5.68 2.56 4.80 3.11

2.64 426.18 2.93 650.45 2.73 3563.17 2.39 906.92 3.14 370.79 2.80 51.23 3.87 370.90 1.90 15.81 3.43 309.02 2.24 17.97

3 3 3 3 4 3 4 1 4 2

NZ Insurance Multisector - Balanced AMP KiwiSaver Balanced 2.4599 AMP KiwiSaver Balanced Fund No.2 1.6355 AMP KiwiSaver Moderate Balanced 2.2946 AMP KiwiSaver SuperLife Balanced Fund 1.6036 AMP NZRT Balanced 4.38647 AMP NZRT Balanced No. 2 1.66016 AMP NZRT Balanced No. 4 3.8241 AMP NZRT Moderate Balanced 3.0337 ANZ Default KiwiSaver Scheme-Balanced 2.4042 ANZ KiwiSaver Balanced 2.5109 ASB KiwiSaver Scheme's Balanced 2.8525 BNZ KiwiSaver Balanced Fund 2.1729 Booster KiwiSaver Balanced 2.5531 Booster KiwiSaver Socially Rsp Bal 2.024 Booster SuperScheme Balanced Portfolio -Fidelity Life Balanced 6.3422 Fisher Funds KiwiSaver Plan Balanced -Fisher FuturePlan - Balanced 5.89023 Fisher TWO KiwiSaver Scheme-Bal 7503.89313 Mercer KiwiSaver Balanced 2.6057 Mercer KiwiSaver Sustainable Balanced -Mercer NZRT Balanced 3.57826 Milford KiwiSaver Balanced Fund 3.5968 NZ Defence Force KiwiSaver Balanced -OneAnswer KiwiSaver Balanced 2.5465 Summer KiwiSaver Balanced Selection 1.5937 Summer KiwiSaver Balanced Selection 1.5937 SuperLife NZRT Balanced 3.07665 Westpac KiwiSaver Balanced Fund 2.5981 Westpac Retirement Plan - Balanced Port 4.9572

7.74 7.76 7.32 5.30 7.63 7.54 7.57 7.19 5.18 5.19 8.49 7.82 5.19 6.06 -3.86 5.85 5.41 6.19 6.42 -6.67 7.44 -5.19 5.15 5.15 5.66 7.37 6.21

NZ Insurance Multisector - Conservative AMP KiwiSaver Defensive Conservative 2.0305 ANZ Default KiwiSaver Scheme Consrv 2.2021 ASB KiwiSaver Scheme's Cnsrv 2.2559 BNZ KiwiSaver Consrv 1.5903 BNZ KiwiSaver First Home Buyer Fund 1.39 Booster KiwiSaver Consrv Fund 1.5379 Fisher Funds KiwiSaver Plan Def Conserv -Fisher FuturePlan - Capital Prot 1.39058 Fisher TWO KiwiSaver Cash Enhanced 2.26198 KiwiSaver Global Select Conservative 1.3188 Mercer KiwiSaver Responsible -Conservativ Milford KiwiSaver Conservative Fund 2.2608 NZ Defence Force KiwiSaver -Conservative OneAnswer KiwiSaver Conservative 2.087 Westpac KiwiSaver Defensive 1.5396 Conservative

7.07 6.65 8.03 7.00 6.19 6.47 6.75 5.33 6.85 7.21

AMP KiwiSaver Balanced No. 4 AMP KiwiSaver Growth AMP KiwiSaver SuperLife Growth AMP NZRT Growth AMP NZRT Growth No. 2 ANZ Default KiwiSaver SchemeBalanced Gr ANZ Default KiwiSaver Scheme-Growth ANZ KiwiSaver Balanced Growth ASB KiwiSaver Scheme's Growth BNZ KiwiSaver Growth Fund Booster KiwiSaver Growth Booster SuperScheme Growth Portfolio Fidelity Life Growth Fisher Funds Growth KiwiSaver Fund Fisher Funds KiwiSaver Plan Growth Fisher FuturePlan - Growth Fisher TWO KiwiSaver Scheme-Gr

--

--

--

772.10

3

8.24

5.68

4.37

345.95

5

--

--

--

11.31

3

5.89

3.13

2.31

473.62

2

7.00

4.50

3.14

247.18

3

2.5374 2.5534 1.7886 3.6516 1.7145

7.33 8.11 5.15 8.01 6.80

4.45 6.74 5.54 6.68 5.54

4.80 73.71 7.64 1114.28 7.18 67.26 7.72 347.61 6.44 22.74

1 4 3 4 2

2.5783

4.72

3.53

5.86

278.59

2

2.7351 2.7363 3.0682 2.5545 2.7805 -7.0562 3.4188 -4.87748 2.91696

4.34 4.72 8.35 7.87 4.76 -3.88 5.27 4.37 4.57 5.43

3.79 3.53 7.16 7.22 5.66 -5.62 6.10 6.32 5.34 6.20

7.16 5.86 8.33 7.40 7.18 -6.83 7.41 8.39 6.99 7.78

275.72 3607.62 6105.44 1893.09 691.97 184.41 5.93 4004.85 2824.97 87.35 1420.06

3 2 4 4 4 -2 3 4 3 4

NZ Insurance Multisector - Growth

Name

Latest 1Yr 3Yr 5Yr Transaction Return Return Return Exit price %

Generate KiwiSaver Growth Fund 2.6336 KiwiSaver Global Select Balanced Growth 3.0888 KiwiSaver Global Select Growth 1.8165 Mercer KiwiSaver Sustainable Growth -Milford KiwiSaver Active Growth Fund 6.4372 NZ Defence Force KiwiSaver Growth -NZRT Global Select Balanced Growth 3.97542 NZRT Global Select Growth 1.84382 OneAnswer KiwiSaver Balanced Growth 2.7769 OneAnswer KiwiSaver Growth Fund 2.9773 SIL Balanced Plus Fund 6.3949 SIL Balanced Plus Fund 6.3949 Summer KiwiSaver Growth Selection 1.4097 SuperLife NZRT Growth 1.80651 Westpac KiwiSaver Growth Fund 2.8572 Westpac Retirement Plan - Dynamic Port 6.043

Morningstar Rating Overall 1834.26 4 290.12 2 89.05 3 269.26 3 6657.28 5 53.23 3 226.29 1 35.53 3 578.31 2 590.80 3 87.69 2 87.69 2 103.37 2 32.78 3 3232.09 4 85.82 2 Size $M

6.56 7.67 7.54 -7.50 -6.64 7.77 4.72 4.34 4.82 4.82 4.68 5.27 7.27 6.20

7.73 3.99 4.26 -8.07 -2.99 4.46 3.53 3.78 3.67 3.67 5.44 5.76 5.94 4.84

8.24 6.12 7.37 -11.11 -5.13 7.53 5.86 7.16 6.03 6.03 6.43 7.47 7.20 6.09

2.1839 1.3711 2.2279 3.52599 1.39125 2.86833 2.2528 2.2919 2.5126 1.8871 2.1843 3.41955

6.82 6.87 6.89 5.57 6.84 6.82 5.40 5.41 8.26 7.47 5.37 4.98

4.08 3.84 4.59 2.87 3.98 4.54 3.15 3.15 5.43 5.46 3.77 4.70

2.66 501.29 2.94 27.71 3.67 736.27 1.54 275.99 3.14 6.36 3.70 189.61 3.48 106.01 3.48 1672.95 4.17 2824.00 4.10 812.29 3.15 243.98 3.97 97.15

2 2 3 1 2 3 3 3 5 4 3 4

2.0391

6.84

4.14

3.06 1349.80

3

-2.31743 1.8653 -1.4015 -2.3148

6.99 6.88 6.80 -7.95 -5.40

5.03 4.17 5.71 -5.89 -3.15

3.53 1069.81 3.09 340.14 4.93 675.61 -- 230.36 6.09 224.58 -9.62 3.48 204.71

3 3 5 4 5 3 3

1.2108

5.62

4.22

3.20

10.14

3

1.3742 1.40773 2.1395 1.7043

5.28 5.58 7.08 7.29

3.90 4.14 4.45 4.99

3.17 30.93 3.42 17.00 3.25 3161.12 4.38 880.66

2 3 3 4

1.1183 1.37694 4.5562 -1.9574 3.3891 3.3891 1.2257 1.2257 1.2257 3.5262

7.43 7.70 5.80 -8.23 7.88 7.88 8.24 8.24 8.24 5.17

2.43 2.69 2.79 -3.76 3.43 3.43 4.50 4.50 4.50 2.97

-1.27 -1.02 0.72 -0.15 -0.11 -0.11 1.36 1.36 1.36 0.58

2.85 6.40 4.43 1.02 8.26 3.44 3.44 7.59 7.59 7.59 8.45

1 1 2 -3 2 2 3 3 3 2

1.31173 1.54538 1.5595 1.70768 1.18676 1.0562 2.2767

4.57 4.28 4.98 4.94 5.05 5.37 8.95

4.33 4.00 4.39 4.73 4.79 5.08 1.19

2.59 2.29 2.57 2.99 3.07 3.37 1.65

20.82 1.47 12.07 316.57 846.44 346.00 1.84

--------

2.05 -5.04 -1.29 0.90 1.49 0.75 1.96 -1.62 2.55

1.16 -8.30 3.89 1.89 3.65 -0.17 -1.00 -0.15 4.09

4.30 1.84 9.06 8.28 9.05 4.19 7.43 7.42 8.36

93.92 41.25 160.62 14.86 109.01 138.53 26.42 39.28 761.46

2 2 4 3 4 3 3 2 4

NZ Insurance Multisector - Moderate AMP KiwiSaver Conservative AMP KiwiSaver Conservative No. 2 AMP KiwiSaver Moderate AMP NZRT Conservative AMP NZRT Convervative No. 2 AMP NZRT Moderate ANZ Default KiwiSaver Scheme-Cnsrv Bal ANZ KiwiSaver Conservative Balanced ASB KiwiSaver Scheme's Moderate BNZ KiwiSaver Moderate Fund Booster KiwiSaver Moderate Declared Rate Fisher Funds Conservative KiwiSaver Fund Fisher Funds KiwiSaver Plan Cnsrv Fisher TWO KiwiSaver Scheme-Cnsrv Generate KiwiSaver Moderate Mercer KiwiSaver Sustainable Moderate Milford KiwiSaver Moderate Fund NZ Defence Force KiwiSaver Moderate OneAnswer KiwiSaver Conservative Bal Summer KiwiSaver Conservative Selection SuperLife KiwiSaver Moderate SuperLife NZRT Moderate Westpac KiwiSaver Conservative Fund Westpac KiwiSaver Moderate

NZ Insurance NZ Bonds AMP KiwiSaver NZ Fixed Interest AMP NZRT NZ Fixed Interest Fidelity Life NZ Fixed Interest Fidelity Life Super-Super Fixed Int OneAnswer KiwiSaver NZ Fixed Interest SIL New Zealand Fixed Interest Fund SIL New Zealand Fixed Interest Fund Summer KiwiSaver New Zealand Fixed Int Summer KiwiSaver New Zealand Fixed Int Summer KiwiSaver New Zealand Fixed Int Westpac Retirement Plan - Accum Port

NZ OE Cash AMP AIT New Zealand Cash AMP PUT Select Cash Fisher Cashplus Fund Mercer Macquarie NZ Cash Fd Milford Cash Fund Nikko AM NZ Cash Westpac PIF Enhanced Cash Fund

NZ OE Equity Region Australasia AMP AIT Australasian Shares Castle Point Ranger Fund Devon Alpha Fund Devon Dividend Yield Devon Trans-Tasman Fund Harbour Australasian Equity Harbour Australasian Equity Focus Fund Harbour Australasian Equity Income Milford Trans-Tasman Equity

4.17102 1.9704 2.2755 1.8336 4.7768 3.833 2.5862 2.0952 4.339

For more information call 0800 888 361

Morningstar Rating Overall 1.54 2.61 2.91 206.49 3 -5.49 -0.19 2.97 18.33 3 -1.14 -1.68 2.03 9.17 1 -0.55 3.85 14.48 350.34 5 13.44 10.09 13.28 141.09 5 8.07 7.47 9.31 382.95 4 19.18 11.53 8.46 123.35 3 1.67 4.96 7.90 114.22 4

Name

Latest 1Yr 3Yr 5Yr Transaction Return Return Return Exit price %

Mint Australasian Equity Fd (Retail) Nikko AM Concentrated Equity OneAnswer SAC Equity Selection Pie Australasian Dividend Growth Pie Australasian Emerging Companies Pie Australasian Growth 2 Fund Pie Australasian Growth Fund QuayStreet Altum

4.2618 2.8091 2.7217 4.5722 7.7746 2.8886 9.2096 2.1413

Size $M

NZ OE Equity Region Australia Devon Australian Fisher Funds Australian Growth Fund Fisher Funds Premium Australian Fund Mercer Macquarie Australian Shares Fd Milford Australian Absolute Growth Fund Milford Australian Equities Wholesale Milford Dynamic OneAnswer SAC Australian Share QuayStreet AU Equity

1.7773 6.8943 3.0661 4.65466 1.6433 1.778 3.5873 5.3849 2.3656

4.92 -1.22 -0.89 8.01 -2.73 3.98 4.59 0.11 8.19

6.12 5.93 6.25 7.07 1.89 6.14 6.75 1.95 5.85

11.88 11.10 11.14 12.48 8.06 11.85 13.03 10.26 10.89

11.21 107.19 221.70 305.97 333.17 526.79 783.40 20.52 123.21

3 3 4 3 2 3 5 2 3

NZ OE Equity Region Emerging Markets AMP AIT Emerging Markets Mercer Emerging Markets Shares Fd

1.73962 1.52155

6.73 5.05

4.65 4.24

4.03 4.92

0.68 5.94

1 2

1.8758

2.26

1.41

9.79

167.30

--

NZ OE Equity Region Europe Pie Growth UK & Europe

NZ OE Equity Region NZ AMP PUT New Zealand Shares AMP PUT New Zealand Shares No. 2 Fisher Funds NZ Growth Fund Fisher Funds Premium New Zealand Fund Fisher Trans Tasman Equity Trust Harbour NZ Index Shares Fund Mercer Ethical Leaders NZ Shares Fd Milford NZ Equities Wholesale Fund Nikko AM Core Equity Octagon New Zealand Equities OneAnswer SAC NZ Share QuayStreet NZ Equity Russell Investments NZ Shares Simplicity NZ Share Smartshares NZ Core Equity Trust

3.91628 2.92938 14.4151 3.4688 9.7599 1.8801 3.24783 4.8565 2.8723 4.0304 6.4549 3.7623 1.9171 1.4718 1.632

-0.91 -0.98 7.52 7.80 3.23 0.32 1.85 2.94 -2.05 -2.79 -1.04 -1.41 -0.82 -0.98 --

-0.30 -0.29 4.04 4.33 4.95 -0.70 0.64 3.41 0.59 -0.20 -0.41 0.49 0.10 0.46 --

2.94 1.59 1.99 1.61 5.63 211.12 5.67 224.74 7.91 119.50 4.18 592.65 4.77 33.12 5.60 995.48 3.26 23.80 3.80 118.95 1.84 51.36 3.51 175.89 3.03 204.87 2.63 1279.90 -88.57

3 2 4 5 5 3 3 5 3 3 2 4 3 2 --

3.95964 2.74265 2.0112 4.0875 3.2479 3.43237 4.0036 4.1604 2.3283 4.2465 3.5058

11.32 11.42 -2.45 9.90 5.67 10.54 8.21 4.13 -8.12 10.73 8.72

10.54 10.52 2.53 3.18 10.52 14.75 11.25 8.14 -0.61 14.63 11.07

11.28 11.31 10.25 8.38 10.11 14.68 11.95 10.01 5.65 14.09 12.88

1.99 2.87 24.73 168.50 624.87 51.16 3094.65 171.03 235.08 716.25 305.64

4 3 1 2 3 5 3 3 1 4 3

NZ OE Equity Region World AMP PUT International Shares No. 2 AMP PUT International Shares No. 3 Elevation Capital Global Shares Fund Fisher Funds Property and Infrastructure Harbour T. Rowe Price Global Equity Mercer Core Global Shares Fd Milford Global Select Wholesale Fund OneAnswer SAC International Share Pie Global Growth QuayStreet International Equity Russell Investments Global Shares

NZ OE Equity Region World - Hedged AMP AIT International Shares AMP PUT International Shares No. 4 ASB World Shares Fisher Funds International Growth Fund Fisher Funds Premium International Fund Fisher Global Fund Mercer All Country Global Shares Idx Fd Mercer Core Hedged Global Shares Fd Mercer Ethical Leaders Global Shares Fd Mercer Global Shares Fd Mercer Macquarie Global Listed Infras Fd Milford Global Equity Nikko AM Global Equity Hedged Pathfinder Global Water Russell Investments Hedged Global Shares

2.24059 4.60867 2.9578 3.6183 3.855 9.7193 1.69218 2.65145 3.06327 5.50026 2.26549 2.7966 3.5824 3.2176

10.67 11.48 9.64 -2.94 -2.74 4.38 9.57 7.32 9.19 9.00 18.51 3.89 6.72 -1.10

9.91 10.53 10.69 5.40 5.64 7.66 9.61 9.01 9.67 10.81 4.61 8.27 9.36 7.01

12.81 14.23 12.84 6.86 7.13 10.21 12.34 12.55 12.43 12.74 9.09 10.18 13.49 9.96

8.95 2.85 492.08 100.62 418.81 158.29 81.51 17.73 12.06 24.60 185.23 1445.65 22.08 61.93

4 4 4 2 3 3 4 3 3 5 1 3 3 3

3.1941

7.16

7.58

11.73 262.24

2

AMP AIT International Shares No. 5 Mercer Macquarie Global Listed RE Fd OneAnswer SAC International Property

4.25614 1.55066 1.6891

5.38 4.28 4.55

4 1 2

NZ OE Equity Sector Global - Real Estate

NZ OE Equity Sector NZ - Real Estate

13.37 -0.71 9.61 -4.57 9.42 -3.19

0.71 166.90 276.84

Morningstar Rating Overall 5 3 1 2

Latest 1Yr 3Yr 5Yr Transaction Return Return Return Exit price %

Size $M

Mercer Australian Property Index Fund Mint Australasian Property Fund OneAnswer SAC Property Securities Westpac PIF Property Fund

3.19683 2.2167 3.7922 5.0108

7.17 4.64 -7.46 -5.65 -6.57 -6.99 -9.60 -4.14

8.39 0.54 0.07 4.69

10.88 16.46 55.98 9.05

1.26387 2.00319 1.89703 2.2957 1.2583

5.93 5.55 5.79 5.33 8.79

2.10 0.89 1.14 1.24 5.87

-0.05 17.00 -1.18 3.54 -0.86 1.86 -0.52 100.14 2.93 43.33

3 1 2 3 5

1.10827

6.20

4.02

2.00

8.12

4

1.0505 1.0956 1.2637 0.9773

7.41 6.49 5.70 6.10

4.18 2.11 1.10 1.15

2.46 433.77 0.14 324.06 -1.33 4.46 -0.08 559.28

5 3 1 3

2.9818

12.52 11.05 17.04 115.04

--

6.92 9.64 6.65 7.29

5.99 7.25 5.58 6.15

7.40 8.43 6.57 7.57

23.62 1.49 16.06 13.38

2 3 2 3

6.73 7.23 6.58 5.14 8.08 5.38 3.88 4.65 7.41 5.14 8.10 11.41 7.02

4.85 5.48 4.72 3.28 6.08 3.58 2.53 2.10 6.31 3.28 8.63 9.70 5.16

4.85 44.51 5.46 14.70 4.72 26.53 4.58 800.32 5.94 688.45 6.00 29.13 4.52 30.39 3.54 3.46 8.35 2100.14 4.58 800.32 8.31 459.28 8.23 37.42 5.36 316.47

2 3 2 2 3 2 2 1 5 2 5 5 3

1.74299 1.8639 1.9353 1.2827 1.8639 2.2886 1.2804 2.2983

5.94 5.84 7.49 8.81 5.84 7.32 7.44 6.70

2.35 3.08 4.16 5.74 3.08 5.74 5.25 4.15

-0.66 2.27 2.17 4.40 2.27 4.32 4.42 2.66

0.95 88.32 73.31 703.92 88.32 128.16 216.65 118.86

1 2 2 5 2 5 5 3

2.08474 2.8001 3.1419 2.4795 6.3323 2.8001 3.1419 4.4606 3.3012 3.2852 3.2493

7.46 4.68 4.29 7.90 7.85 4.68 4.29 4.69 8.21 7.03 13.03

6.26 3.49 3.74 6.71 8.26 3.49 3.74 3.50 9.82 5.63 6.47

7.29 5.82 7.12 7.83 11.05 5.82 7.12 5.84 9.96 6.76 6.71

4.94 556.66 339.67 288.00 4487.28 556.66 339.67 46.02 556.99 102.68 102.46

3 2 3 4 5 2 3 1 5 3 3

the extent that any of this information constitutes

1.45348 1.58665 2.29771 2.03411 2.1351 1.9995 2.0893 1.0522 2.0011 1.0474 2.1351 1.962

6.52 6.44 5.95 5.82 5.36 7.67 7.85 7.01 9.78 7.47 5.36 6.98

3.81 4.25 3.74 3.07 3.11 4.55 4.98 4.98 5.38 4.22 3.11 4.67

2.44 2.19 3.38 6.76 2.89 23.84 1.71 6.30 3.44 444.46 2.76 503.67 3.69 791.66 5.95 295.58 6.30 2870.39 3.53 56.84 3.44 444.46 3.97 389.51

1 3 2 1 3 2 4 5 5 3 3 4

New Zealand products) before making any decision

1.88138

7.43

2.39

-1.09 140.38

1

NZ OE Global Bond AMP AIT Fixed Interest Income - UT36 AMP AIT Global Fixed Interest AMP PUT Global Fixed Interest No. 2 Fisher BondPlus Fund Fisher Funds Income Mercer Macquarie Global Income Opps Fd Milford Global Corporate Bond Fund Nikko AM Global Bond OneAnswer SAC International Fixed Intrst Russell Investments Global Fixed Int

Name

Latest 1Yr 3Yr 5Yr Transaction Return Return Return Exit price %

Fisher New Zealand Fixed Inc Trust Harbour NZ Core Fixed Interest Harbour NZ Corporate Bond Mercer Macquarie NZ Fixed Interest Fd Mercer Macquarie NZ Short Duration Fd Milford Trans-Tasman Bond Nikko AM NZ Bond Nikko AM NZ Corporate Bond Octagon New Zealand Fixed Interest OneAnswer SAC NZ Fixed Interest QuayStreet Fixed Interest Russell Investments NZ Fixed Interest Simplicity NZ Bond Westpac PIF Corporate Bond Fund

1.4941 1.0242 1.0072 1.61032 1.26378 1.1868 0.9882 1.1954 2.0638 1.9413 1.4749 1.2081 1.1194 1.6327

Morningstar Rating Overall 81.54 2 284.72 3 527.67 4 228.23 2 57.40 4 1389.33 5 278.52 3 408.27 5 223.43 3 11.22 3 448.04 4 151.89 3 587.70 2 19.12 4

Name

8.99 8.61 8.87 8.57 7.81 8.24 8.96 8.95 8.23 8.10 7.95 8.42 8.31 4.47

4.03 4.37 5.17 3.82 4.77 5.53 4.44 5.23 4.47 3.64 4.98 4.06 3.53 -0.84

0.01 0.72 1.59 -0.04 2.21 2.48 0.68 1.97 1.32 0.03 2.50 0.35 -0.77 1.62

Size $M

NZ OE Miscellaneous Salt Long Short Fund

NZ OE Multisector - Aggressive AMP AIT Aggressive AMP AIT eInvest Aggressive AMP AIT Growth AMP AIT Select Growth

2.98947 2.25056 2.75858 2.66068

NZ OE Multisector - Balanced AMP AIT Balanced AMP AIT eInvest Balanced AMP AIT Select Balanced ANZ Invmt Fds Balanced ASB Balanced Mercer Ethical Leaders Balanced Fd Mercer Income Generator Fd Mercer Macquarie Real Return Opps Fd Milford Balanced Fund OneAnswer MAC Balanced QuayStreet Balanced QuayStreet Socially Responsible Inv Westpac Active Balanced Trust

2.65792 1.82364 2.40002 2.433 2.3497 2.71297 1.11614 1.48109 3.4909 2.433 2.9452 2.8757 3.1429

NZ OE Multisector - Conservative AMP PUT Select Income ANZ Invmt Fds Conservative ASB Conservative Milford Conservative OneAnswer MAC Conservative QuayStreet Conservative QuayStreet Income Westpac Active Conservative Trust

NZ OE Multisector - Growth AMP AIT eInvest Growth ANZ Invmt Fds Balanced Growth ANZ Invmt Fds Growth ASB Growth Milford Active Growth OneAnswer MAC Balanced Growth OneAnswer MAC Growth OneAnswer SAC Balanced Growth QuayStreet Growth Westpac Active Growth Trust Westpac Active Growth Trust

NZ OE Multisector - Moderate AMP AIT eInvest Conservative AMP AIT eInvest Moderate AMP AIT Moderate AMP AIT Select Conservative ANZ Invmt Fds Conservative Balanced ASB Conservative Plus ASB Moderate Harbour Income Milford Diversified Income Fund Mint Diversified Income OneAnswer MAC Conservative Balanced Westpac Active Moderate Trust

Returns are calculated to 30/04/25.

Returns are calculated before tax, after fees, except for the non-PIE categories, which are after tax and after fees.

For more information about this table and the methodology behind the data, contact helpdesk.nz@morningstar.com or go to www.morningstar.com.au © 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. To advice, it is general advice and has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Limited (subsidiaries of Morningstar, Inc.) without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement (in respect of Australian products) or Investment Statement (in respect of to invest. Neither Morningstar, nor Morningstar’s subsidiaries, nor Morningstar’s employees can provide you with personalised financial advice. To obtain advice tailored to your particular circumstances, please contact a professional financial adviser. Please refer to our Financial Services Guide (FSG) for more information www.morningstar.com.au/fsg.asp

NZ OE NZ Bonds AMP AIT NZ Fixed Interest

www.goodreturns.co.nz 33

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TOP 10

TOP 10

As usual it has been a busy month on Good Returns.

Here is a list of the top 10 most read stories over recent weeks.

01

Milford's KiwiSaver shines while ANZ enjoys a rare March qtr Milford Asset Management’s KiwiSaver funds enjoyed a better performance than all other KiwiSaver funds in the March quarter but returns were generally poor, the latest Melville Jessup Weaver survey shows.

02

Kernel takes on Sharesies (and others)

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No lid on KiwiSaver fees as balances grow As KiwiSaver balances continue to swell the scheme is becoming a cash cow for investment managers, prompting one industry observer to question why there is not more downward pressure on fees.

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Diminishing KiwiSaver balances tip up first home buyers Mortgage brokers say they are hearing from many first-home buyers wondering what to do about the slump in their KiwiSaver balances caused by US President Donald Trump's tariff war.

Keep up with the news at

GOODRETURNS.CO.NZ

34 | ASSET SPRING | 2023

KiwiSaver contribution rates to increase; Cuts to Govt contribution The Government is increasing contribution rates to KiwiSaver, but at the same time reducing, and in some cases, removing the member tax credit.

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Sold sign goes up on Consilium FirstCape has agreed to buy Consilium for an undisclosed sum.

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Kernel Wealth has transformed from an index fund manager into an investment platform taking in the likes Shareies and Hatch.

04

Chubb names new CEO Chubb's new chief executive has 30 years of experience in the retail banking and insurance industries.

KiwiSaver or KiwiTaxer? The changes high on adviser wishlists There remains no real incentive for clients to direct extra contributions into KiwiSaver, so long as New Zealand is still a global outlier in its choice of tax structure around retirement savings, according to one financial advisory firm leader.

03

06

The reason why health insurance premiums are soaring A new report shows medical costs in New Zealand have seen some of the sharpest increases in the AsiaPacific region and worldwide.

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New managed fund offering targets savers A new managed fund spearheaded by an ex-Fisher Funds manager aims to offer savers an alternative to banks promising retail access to wholesale rates.

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