Kiwi Wealth has rebooted its range of retail managed funds launched last year, opening up a digital doorway and a prime-time advertising campaign.
The three funds, officially launched last May, offer retail investors the standard choice of conservative, balanced and growth portfolios with a blend of offshore equities and world-wide fixed income assets.
As reported last year, the three funds feed into two wholesale portfolio investment entity (PIE) funds managed by the Kiwi Investment Management (KIM) – a sister entity of Kiwi Wealth.
The KIM funds are also offered to the wholesale/institutional market in a division headed by Peter Verhaart.
But after lying more or less dormant over the last 12 months (attracting about $8 million to date), Kiwi Wealth has kicked the retail funds marketing into gear, promoting the products in a prime-time TV ad campaign.
Melissa Vasta, Kiwi Wealth head of product, said the digital sales channel – the main gateway to the retail funds – was only recently completed.
“We don’t have robo-advice over the retail funds yet,” Vasta said. “Customers just self-select from the conservative, balanced and growth options.”
Kiwi Wealth launched a robo-advice service under a Financial Markets Authority (FMA) exemption last year, targeting its KiwiSaver scheme members.
Vasta said the retail funds could appeal to Kiwi Wealth KiwiSaver members looking for non locked-in savings options.
“Our latest research found that the two main reasons people are looking to invest is to fund their children’s education or supplement retirement savings outside KiwiSaver,” she said.
Rock-bottom term deposit rates were also prompting savers to explore other investment options, Vasta said.
In a release she said: “We’ve launched this product because there are too few good options available for everyday Kiwis to easily access an actively-managed portfolio. The initial investment threshold is too high, they’re too expensive or too inflexible.”
The Kiwi Wealth funds have a $500 minimum with total annual fees ranging from 0.74 per cent for the conservative option to 1.07 per cent for growth.
As per the Kiwi Wealth house philosophy, the new funds have zero to minimal exposure to NZ equities with the aim to offer diversification away from local risks through global shares. The fixed income portfolio includes both NZ and offshore assets.
Kiwi Wealth also operates an active currency overlay plus a responsible investment policy that has some exclusions and a broader environmental, social and governance (ESG) approach.
The funds use MMC for registry and Public Trust as custodian and supervisor.
Vasta said the new products could eventually be available through other channels including the in-house Hatch (that currently focuses on direct US shares) and InvestNow platforms.
The direct-to-consumer fund market is slowly growing in NZ with the advent of InvestNow, Sharesies, Smartshares and the like but, as the Kiwi Wealth move shows, fund managers are also keeping a hand in the game.
For example, Nikko Asset Management launched its GoalsGetter robo-advice service this year, aiming to build a direct following for its retail and KiwiSaver funds.
While most managers might have a direct retail book, many of them prefer to outsource the administration (and messy client relations) to financial advisers and/or the burgeoning direct platform market.