While we charge you a fee to cover all of the regular, ongoing costs of managing and administration of our scheme, there are also other expenses, on top of our fee, and related to investing your money, that you should know about.
Investment costs are the costs we pay to other parties to buy, sell and, in some cases hold, the shares and other investments that make up the Scheme’s funds. These aren’t unique to our scheme, or to KiwiSaver providers - they are the equivalent of costs you would incur if you decided to buy shares for your own investment fund.
Investment costs are either charged directly to your account, in addition to the fee you pay us to manage and administer your savings, or they are incorporated into the price of assets. They have an impact on the investment returns you receive, so it’s important you know about them.
However, we always report your returns to you after all costs, expenses and taxes – so these costs are already reflected in your returns.
Investment costs include:
Due to the cost advantages that come from the size of our scheme, we do try to minimise investment costs by negotiating low broking rates.
We aren’t able to tell you in advance exactly how much your investment costs will be because they can vary depending on the investment decisions we make - such as how often we buy or sell investments - the size of the transactions and the types of assets we hold. This means we can’t tell you in advance what your total investment costs will be. We can, however, show you what the cost of investing in funds has been recently – please see the table below. And for more information on investing costs, please see the Product Disclosure Statement.
These are indirect costs which are charged when we invest in a fund offered by another fund manager. We might do this when we want to access an investment opportunity that we can’t otherwise access ourselves. This may be because the manager of a particular fund has expertise we want to take advantage of, or if the fund is more cost-effective than direct investment for the same types of assets.
We estimate that, on a forward-looking basis, all our costs will be:
|Investment fund||Costs of investing in funds|
The indirect costs of investing in funds are calculated as: fees charged by the funds we invest in for the most recent month (annualised), divided by funds under management.