Welcome to the June 2025 Manager’s Perspective. Each month, InvestNow invites our investment managers to discuss our monthly theme. This month, we asked Fisher Funds some questions to help you better understand their investment styles, strategies, and perspectives on the recent KiwiSaver changes announced in the budget. Read the questions and their responses below.

Q1: The Budget 2025 changes to KiwiSaver increase contribution rates but reduces government incentives. Do you think this strikes the right balance, or were there other changes that you would’ve liked to see to improve member outcomes?

The announced changes to KiwiSaver were well-signalled and we understand the Government’s motivation to balance the books.

It makes sense to increase default contribution rates and moving to 4% over three years is a good start. However, New Zealanders will understandably be wanting to know what comes next, over the medium term, to ensure a nest egg is available to them at retirement.

Massey University Research notes the average couple, living in a big city will need between $120,000 and $1.2m in the bank for retirement – and that assumes they’re homeowners and mortgage free.

Compare that with the current average KiwiSaver balance of those aged 61-65 which is $69,000.

Closing that gap will need a clear, national plan. It’s our view that a ten-year roadmap is needed to give New Zealanders certainty. Savers and employers need to know when and how contributions will change and be given the right guidance and education.

While changes to the Government Contribution will help it balance the books it is unclear how halving this contribution will further incentivise hardworking Kiwis looking to save for their retirement.

Our focus remains on helping New Zealanders build a secure retirement.

Q2: As KiwiSaver balances continue to grow, investors and fund managers alike are increasingly considering diversification beyond conventional assets – what opportunities do you see in this space or how do you see KiwiSaver portfolios evolving going forward?

We recently shared information with the market that we will be evolving our portfolio by adding more private equity to select funds in our KiwiSaver schemes.

We have earmarked more than $1 billion over the medium term for a wider private equity strategy over the next few years, with several hundred million dollars earmarked for New Zealand businesses.

Private equity is well-suited to KiwiSaver because both are about building wealth over the long-term.

I expect that about 10% of our KiwiSaver funds under management will be allocated to private equity in the next three to five years.

These asset classes have a long history of providing the opportunity for higher returns than public equity markets. Even an extra 0.5% return per annum on your KiwiSaver investments could result in tens of thousands of extra dollars in retirement.

Q3: With KiwiSaver now comprising a meaningful $100 billion+ asset pool, there’s ongoing debate about increasing investment back into ‘New Zealand Inc’ via KiwiSaver – what’s your view on this and how do you weigh supporting local economic development versus global diversification needs?

We apply the same lens to our investment decisions locally as we do internationally. We’ve been doing that with some small initial investments in private equity for several years through trusted local establishments like Movac, Pioneer and Direct Capital.

We have about $300m to invest locally and we’re targeting established companies with strong leadership, a clear growth trajectory, and a need for capital and partnership to take them to the next level.

We’ve been deliberately building our capabilities in this space by investing in a specialist in-house private equity team led by Michael Walmsley to ensure we’re set up for long-term success. It’s also important to maintain adequate diversification across different geographies and sectors, which is why we also have the global aspect to the programme.

Disclaimer: Fisher Funds Management Limited is the issuer of the Fisher Funds KiwiSaver Plan and you can find a copy of the Fisher Funds KiwiSaver Plan PDS at fisherfunds.co.nz.

Disclaimer

The following commentaries represent only the opinions of the authors. Any views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement or inducement to invest. All material presented is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice.

This article is made available by InvestNow Savings and Investment Service Limited (“InvestNow”). The information and any opinions in this publication are based on sources that InvestNow believes are reliable and accurate. InvestNow, its directors, officers and employees make no representations or warranties of any kind as to the accuracy or completeness of the information contained in this publication and disclaim liability for any loss, damage, cost or expense that may arise from any reliance on the information or any opinions, conclusions or recommendations contained in it, whether that loss or damage is caused by any fault or negligence on the part of InvestNow, or otherwise, except for any statutory liability which cannot be excluded. All opinions and market commentary reflect InvestNow’s judgment on the date of this publication and are subject to change without notice. This disclaimer extends to any entity that may distribute this publication. The information in this publication is not intended to be financial advice for the purposes of the Financial Markets Conduct Act 2013, as amended by the Financial Services Legislation Amendment Act 2019. In particular, in preparing this document, InvestNow did not take into account the investment objectives, financial situation and particular needs of any particular person. Professional investment advice from an appropriately qualified adviser is recommended before making any investment decision. All investments involve risk.

Create an Account

Create an online account to invest.

Login

Login to your online account to invest.