Auckland housing. Build-to-rent housing and first home loans are among the non-listed assets investors can put their money into, not-for profit firm Simplicity says. File photo Photo: 123rf
Low cost, not for profit KiwiSaver provider Simplicity is expanding its savings offerings with seven new funds and further lowering its fees.
The provider also increased its asset allocations of build-to-rent housing, first home lending and private equity, bringing the total target asset allocation to unlisted assets to 10 percent of its managed funds.
Managing Director Sam Stubbs said investing in unlisted assets, like build-to-rent housing, was common in overseas pension funds, but less so in New Zealand.
Sam Stubbs. Photo: Supplied
"KiwiSaver funds here are very conservative in the way that they manage money and it's very out of sync with what happens globally," he said.
"We're increasing investment in areas intended to enhance returns for our investors over the long term, support local innovation and help get more families into warm, dry and affordable homes."
Stubbs said Simplicity was also expanding its range of KiwiSaver and Investment Funds, including high growth and defensive funds costing 0.29 percent in fees per annum.
It was also launching three new global share and bond investment funds charging a 0.15 percent total annual fee, with no entry or exit fees.
Stubbs said the new funds were designed to increase diversified and offshore single sector investment options for members.
As international investments will be held in New Zealand-based PIE funds [Portfolio Investment Entity managed funds] set up by Simplicity, the funds could now access New Zealand withholding tax treaty rates for overseas investment income.
Stubbs said the provider's management and administration costs for existing diversified funds had been reduced by the recent switch from Vanguard to DWS International GmbH to manage international investments.
That meant the total annual fund charge for all existing diversified KiwiSaver and Investment funds would drop by about 3.3 percent, from 0.30 percent to 0.29 percent per annum, he said.
"This is the sixth time in five years that fees and charges have been reduced," Stubbs said.
"As a nonprofit, we pass on the benefits of scale to members, not to shareholders or management bonuses."