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Benchmarks

What is a benchmark?

A benchmark is a standard against which the performance of your investments can be measured. To be meaningful, the benchmark must be appropriate to the market you’re investing in. There’s no point in comparing a global share fund against the performance of a term deposit, or a bond fund against a property index.

Why are benchmarks important?

Benchmarks are a useful tool for investors to judge whether or not their investment manager is adding value; that is, are returns higher than the benchmark and, therefore, is the manager adding value or not? There are real dangers in focusing on short-term comparisons of investment performance; even the very best investment managers fail to deliver benchmark performance in some years.

The Kiwi Wealth KiwiSaver Scheme benchmarks

 

snail-cash.png Cash benchmark

The Cash benchmark is designed to measure a fund of cash and constitutes 100% S&P/NZX 90-Day Bank Bill Index**.

 

snail-cashplus.png CashPlus benchmark

The CashPlus benchmark is designed to measure a fund of cash and fixed interest and constitutes 75% S&P/NZX 90-Day Bank Bill Index** and 25% S&P/NZX NZ Government Bond Index*.

 

conservative-shirttie.png Conservative benchmark

The Conservative benchmark is designed to measure a ‘conservative’ fund of fixed interest and equities and constitutes 42.5% S&P/NZX 90-Day Bank Bill Index**, 42.5% S&P/NZX NZ Government Bond Index*, 10% MSCI All Country World Index, 5% MSCI All Country World Index 100% Hedged to NZD Index.

From 1 October 2007 through to 31 December 2010, the benchmark constituted 40% S&P/NZX 90-Day Bank Bill Index**, 40% S&P/NZX NZ Government Bond Index*, 10% Gross MSCI the World Index, 10% Hedged Gross MSCI the World Index.

 

default-hourglass.png Default benchmark

The Default benchmark is designed to measure a ‘conservative’ fund of mostly fixed interest and cash, with a specified allocation to shares and constitutes 50% S&P/NZX 90-Day Bank Bill Index**, 30% S&P/NZX NZ Government Bond Index*,10% MSCI All Country World Index, 10% MSCI All Country World Index 100% Hedged to NZD Index.

 

balanced-spinningtop.png Balanced benchmark

The Balanced benchmark is designed to measure a ‘balanced’ fund of world equities and fixed interest and constitutes 22.5% S&P/NZX 90-Day Bank Bill Index**, 22.5% S&P/NZX NZ Government Bond Index*, 20% MSCI All Country World Index, 35% MSCI All Country World Index 100% Hedged to NZD Index.

From 1 October 2007 through to 31 December 2010, the benchmark constituted 20% S&P/NZX 90-Day Bank Bill Index**, 20% S&P/NZX NZ Government Bond Index*, 40% Gross MSCI The World Index, 20% Hedged Gross MSCI the World Index.

 

growth-rocket.png Growth benchmark

The Growth benchmark is designed to measure the equity market performance of all countries with a moderate position in cash and fixed interest and constitutes 7.5% S&P/NZX 90-Day Bank Bill Index**, 7.5% S&P/NZX NZ Government Bond Stock Index*, 30% MSCI All Country World Index, 55% MSCI All Country World Index 100% Hedged to NZD Index.

From 1 October 2007 through to 31 December 2010, the benchmark constituted 100% Gross MSCI the World Index.

The actual asset allocation of each investment fund may at times differ to the asset allocation for the relevant benchmark because we have an active investment management style. You can find the actual asset allocation for each investment fund in our periodic disclosure statements.

*This index changed its name from the ANZ New Zealand Government Bond Daily Gross Return Government Stock Index on 1 July 2015.
**This index changed its name from the ANZ New Zealand 90 Day Bank Bill Gross Return Index on 1 December 2015.

Benchmark notes

  • Unless otherwise specified our returns and benchmarks are always shown after all taxes and fees have been deducted.
  • Annual management fees are deducted at up to 1% p.a. for the Kiwi Wealth KiwiSaver Scheme, as per the fee schedule, with the exception of the Cash investment fund which has member fees deducted at 0.45% p.a. the Default investment fund which has member fees deducted at 0.55% p.a. and the CashPlus investment fund which has member fees deducted at 0.7% p.a. Annual management fees are considered tax deductible.
  • The ‘MSCI All Country World Index 100% Hedged to NZD Index’ is a custom index calculated by MSCI for, and as requested by, Kiwi Wealth.
  • Transaction fees on Government Bonds are modelled at 0.02% p.a.
  • Transaction fees on equities are modelled at 0.075% p.a.
  • Tax on bonds and bank bills is modelled by multiplying the net monthly change by the top PIR.
  • Tax on equities is modelled by multiplying 5% by the top PIR.

If you have any questions about benchmarks, please feel free to contact us.