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Kiwi Wealth investing policies

Kiwi Wealth, as the investment manager of the Kiwi Wealth Private Portfolio Service, Kiwi Wealth KiwiSaver Scheme, Kiwi Wealth Managed Funds and the Kiwi Wealth Super Scheme adheres to a set of internal policies to ensure that we act responsibly and fairly when investing customers’ money.

These policies cover: responsible investing, trade execution and allocation, related party transactions and conflicts of interest.

Responsible Investment Policy

Trade policies

Conflicts of interest  

Asset valuation and pricing policy

 

 

Responsible Investment Policy

Our Responsible Investment Policy sets out how we will incorporate responsible investing principles and practices into our investment decisions. This includes decisions to invest in securities and decisions to appoint investment managers. This policy also includes Kiwi Wealth’s Proxy Voting Policy.

Trade policies

The following policies apply to the ways in which we buy and sell investments.

Trade execution policy

At all times, Kiwi Wealth will act in the best interests of customers and take all reasonable steps to achieve the best possible results, taking into account the following trading criteria:

  • Price
  • Cost of the transaction
  • Speed
  • Liquidity and the likelihood of execution
  • Likelihood of settlement
  • Size and nature of the trade
  • Specialisation of market making in derivatives
  • Counterparty credit rating and quality
  • Any other relevant considerations

Third parties or ‘counterparts' are used by Kiwi Wealth to execute trades. We have agreements in place with selected counterparts which are subject to approval by Kiwi Wealth's Investment Governance Committee.

Counterparts are regularly reviewed to ensure overall quality and stability, and that trades are being executed in the best interests of clients in accordance with best execution principles.

Trade allocation policy   

Kiwi Wealth has trade allocation procedures to ensure that no group of customers receives preferential treatment. Trades are allocated proportionally to a client’s share of the total trade executed. This ensures the trade is allocated on an equal and fair basis.

It’s important to note that if a non-fixed interest trade is not fully executed, i.e. due to lack of liquidity (the ability with which an investment can be converted to cash), the part that’s executed is then allocated proportionally to a client’s share of the trade.

If there is not enough liquidity to fully execute a fixed interest trade, clients are allocated to a target percentage based on un-invested cash.

All investments are subject to this policy including initial public offerings and private placements.

Conflicts of interest

Kiwi Wealth is owned by Kiwi Wealth Management Ltd, is part of the NZ Post group of companies and a related company of Kiwibank. Kiwibank and NZ Post are large issuers within the New Zealand debt market, with Kiwibank being a provider for cash and term deposit options. It is Kiwi Wealth's view that to exclude them from our preferred investment list would be detrimental to the interests of our clients.

Dealing with related parties could be seen to be a conflict of interests. Therefore, we adhere to the following related-party processes to manage any potential risks of investing in Kiwibank and NZ Post issues.

  • The foremost rule is that the customer’s interests must always come first. Any transaction must be done at arm’s length, it must be done on standard commercial terms, and it must be to the benefit of the customer.  
  • The transaction must always fit within our investment guidelines regarding security exposure, issuer exposure, maturity and credit risk. Two current policies will continue to be applied - any commission received from a new issue must be rebated to the customer and any trade which cannot be fully executed will be proportionally distributed across customers.  

For clarity, this part of the policy extends to dealing in related party investments through non-related party brokers (for example, buying Kiwibank bonds through ANZ).

Policy for dealing through related parties    

Kiwi Wealth currently has a broking relationship with the Financial Markets division of Kiwibank. To ensure that the transaction is done at arm’s length and on commercial terms, any deal done through the Kiwibank trading desk must be done on a competitive quote basis. All dealings with or through a related party are reported to our audit committee and to the FMA quarterly.

Valuation pricing methodology

This policy sets out the principles used for asset valuation and pricing of all Kiwi Wealth funds including Kiwi Wealth KiwiSaver Scheme (KWKS), Kiwi Wealth Private Portfolios (KWPP), Kiwi Wealth Growth Fund (GPIE), Kiwi Wealth Fixed Interest Fund (FIPIE), Kiwi Wealth Managed Funds (KWMF) and the Kiwi Wealth Super Scheme (KWSS).

Asset valuation and pricing policy (PDF, 426KB)

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