I Changed KiwiSaver...

On the prompting of Sam Stubbs awful comments about Charlie Kirk, I changed my Kiwisaver from Simplicity Growth to Milford Aggressive. I may have been too quick in making the change, as some further research has indicated to me that Kernel Wealth High Growth fund provides superior returns. Here I will look at why I made the change, and why I think my Kiwisaver will continue to grow.

About five years ago, I made the change from ASB Kiwisaver to Simplicity Growth. The reason I did so, was because I liked Simplicity's low fees and actually liked Sam Stubbs at the time. I liked the fact that it was a charity and when it started allocating funds for build-to-rent projects, I thought it was a good idea. But I have seen the superior returns that high-growth equities like technology, have above property shares in my own share portfolio. As I am 35, I am still young enough that I don't need to have low growth/ income shares. I should be able to ride out some big downturns and by taking on some more risk, hopefully come out better in the long-term. Even in their High-Growth Fund, which I was in, Simplicity still put 10% of the fund into Unlisted Property. Without using leverage, property is not a high-growth asset class, so I don't know why they contributed 10% of the High-Growth Fund to stable/low-growth property.

Milford Aggressive Fund on the other hand, which I have moved my Kiwisaver too, invest 95% of the fund into Growth Assets i.e. equities. Their 1-year return has been 11.35%, and since its inception five years ago, the annualised return has been 11.21%. Simplicity High Growth has been 13.68% over the past year. Which has obviously beaten Milford. Although, Simplicity Growth has lagged Milford Aggressive over the last five years. Every investment disclosure you read though, always says that past performance does not guarantee future results. Over the past five years, I have benefitted from being with Simplicity. Their low fee of 0.25% and good returns have helped my Kiwisaver to grow; but I don't think that their exposure to NZ equities and property will help them in the future.

The Kernal Wealth High Growth Fund offers the same (0.25%) management fee as Simplicity, while achieving a fund return of 12.94% per annum over the past five years. Milford Aggressive has a higher fee of 1.15%. But I have figured that if the return is better, then the higher management fee won't matter. Milford Aggressive Fund has a 58.5% allocation to US Stocks, and Kernal Wealth High-Growth has a 44.4% weighting to the US. Picking between the two is difficult, but while Kernal Wealth has had better performance in the past than Milford Aggressive, I believe that its bigger exposure to US equities will enable Milford to outperform in the future. In any case, the difference between the two will be negligible. I think that my money will be safe and my Kiwisaver will continue to grow with Milford. But if I find that Kernal is continuing to outperform, it won't be too hard to change my Kiwisaver again.