Growth in KiwiSaver has prompted some investors to look at putting more money into other managed funds, one investment provider says.
Investment platform InvestNow offers investors access to managed funds via an online account.
Investors can start with a smaller deposit than is usually required, and no administration or transaction fees.
General manager Mike Heath said it now had 11 fund managers on the platform, including AMP Capital, ANZ Investments, Harbour, Salt and Vanguard.
Some of these fund managers would normally require minimum investments of $10,000. Via InvestNow, investors can start with $250.
Now it has added SmartShares funds, which are passively invested to track market indexes. Its most popular, the NZ Top 50, invests in the top 50 listings on the NZX main board.
InvestNow will offer seven SmartShares funds through which clients will be able to invest in New Zealand, Australian, US, Europe and other global markets.
There has been a growing shift to this style of investment because it is cheaper than active management, where fund managers try to beat market returns with their investment selections.
InvestNow already offered passive funds run by Vanguard and expected SmartShares to be popular, too, Heath said.
The two Vanguard funds charge 0.2 per cent and 0.26 per cent per year in management fees, compared to 1.79 per cent for Harbour’s Australasian Equity Focus Fund – Retail, or 1.56 per cent for Russell Investments’ Hedged Global Shares Fund.
The SmartShares funds’ fees range from 0.35 per cent per year to 0.75 per cent.
Heath said investors would benefit because there wasnon ongoing commitment required to invest in SmartShares via InvestNow. Those who invest directly through the NZX sign up to regular savings plans, where a set amount of money is invested each month.
He said there was a wide range of people using InvestNow services, from seasoned investors through to younger people and those setting up accounts for their children.
After 10 years of KiwiSaver, some people were becoming more aware of how managed funds could be used to build wealth, he said. “They want to do something in parallel with more control and flexibility.”
There is now $75 million of client funds invested through InvestNow.
Although it offers no advice, Heath said the platform was able to share stories of its clients so that others could see their strategies and how they hoped to achieve their investment goals.