Know your KiwiSaver portfolio

by Tony Ryburn

I was amazed to see the claim in article Portfolio Secrecy in the Sunday Star Times on 20 April that KiwiSaver providers keep their portfolios ‘secret’.

Some claim their portfolios are their intellectual property, but given their performance of late and likelihood that they won’t outperform market averages in the long run the cynic might ask what value they are trying to protect.

It was noted in the article that ‘keeping portfolio information secret made it hard for investors to cry foul over poor stock picking and easier for firms to peddle lame excuses for poor performance.’ I can’t help suspecting that, sadly, this is much closer to the truth than the need to protect ‘intellectual property’.

The thing that irks me most is that investors have the right to know what is being done with their money. Most are very conscious about how much they earn and how they spend their money. But when it comes to savings they are conditioned to accept very sketchy information about what has been done with their savings and infrequent information about what is their rate of return.

KiwiSaver providers should be encouraging investors to take an active interest in their investments and in how their portfolio is performing. It should be made mandatory for them to provide portfolio breakdown and asset allocation information at least monthly as well as online access to the true annualised performance of each investment and the total portfolio that is updated every day.

Why? Well if KiwiSavers were provided with this information many would become much more interested, knowledgeable and committed investors. This would, in time, lead some to the conclusion that they could do better making their own investment decisions and managing their own portfolios. (Which is another reason why providing this information would have to be mandatory!)

Through KiwiSaver we have an ideal opportunity to encourage Kiwis to broaden their investment horizons beyond bank deposits, finance companies and residential property. Hopefully more Kiwis will also see the benefits of investing directly in the share market in their own right. Then we will finally see a much needed improvement in Kiwis’ truly woeful record of direct investment in the share market.

An article in the Dominion post today claims ‘Low-cost KiwiSaver schemes doomed to fail’. It hints strongly that low fees will impact on the provision of a decent service and presumably the ability to provide decent information to investors. I cannot help wondering whether the gripe about low fees is a bit self-serving but be that as it may, the failure to provide comprehensive information to investors is simply not acceptable.

DIY investors in the NZ and Australian share markets can access all the portfolio information they need at little cost through Sharesight and investors should expect no less from their KiwiSaver provider.

This information is not a recommendation nor a statement of opinion. You should consult an independent financial adviser before making any decisions with respect to your shares in relation to the information that is presented in this article.