Auckland-based funds management shop, Generate, has bowed to KiwiSaver member demand for aggressive investment options with the launch of three almost 100 per cent pure growth funds.
While the flagship Generate Focused Growth fund already offers a high-octane 95 per cent exposure to equities (including a 15 per cent target tilt to listed property), the three new KiwiSaver strategies aim for 98 per cent purity in their respective asset classes.
As reported last week, high-growth KiwiSaver funds are on-trend with Pathfinder and Pie Funds the latest to enter an aggressive market populated recently by ASB, ANZ, Kōura, QuayStreet, Simplicity and Westpac among others.
The Australasian and Thematic (international equities) funds are KiwiSaver variants of Generate products already available as stand-alone unit trusts: the existing KiwiSaver diversified funds also tap into the strategies.
But the KiwiSaver product roll-out also came with a new Global Fund (released in unit trust format at the same time, too) – a concentrated portfolio of international stocks overseen by portfolio manager, Warwick Simons.
Former Kiwi Wealth portfolio manager, Nathan Field, looks after the more diversified Thematic Fund while Daniel Frost and Andrew Bolland manage the Australasian equities strategy.
The firm also uses some external managers for global equities.
Generate chief, Henry Tongue, said in a release: “Our members also told us they wanted more choice, so we listened. These new Generate KiwiSaver funds are all about giving them more options to invest in a way that suits their long-term goals.”
As well as the Global Fund, Generate opened up two new products in its unit trust suite: the Fixed Interest Fund, managed by Ayrton Oliver, and the CashPlus Fund – the latter product a mirror version of the Generate KiwiSaver Defensive Fund (now also taking on the CashPlus name).
Following the product refresh the Generate KiwiSaver and unit trust ranges almost align but with a price differential. On a like-for-like product setting, the Generate KiwiSaver annual fees from 0.4 per cent of the CashPlus fund to 1.19 per cent for the new Global Fund compared to 0.48 per cent and 1.27 per cent, respectively, in unit trust format.
However, Generate KiwiSaver members also pay a $36 annual administration fee.
According to Morningstar, Generate KiwiSaver reported more than $6.6 billion under management as at the end of last year. By contrast the firm’s non-KiwiSaver offering has garnered only about $80 million since launch in 2019 with the majority ($60 million) housed in the Focused Growth fund.