Kernel Wealth Launches KiwiSaver Scheme
Kernel Wealth, a New Zealand-based investment company, launched its KiwiSaver plan in May 2022. New to the KiwiSaver world, Kernel Wealth has released only a single fund option for investment, thus being a growth fund. A growth fund is which will have more volatility in the hope of a greater return.
What's different about Kernel Wealth?
Kernel Wealth is a new provider that launched its KiwiSaver plan and has designed this fund for the purpose of long-term investment, with an emphasis on low fees. However, the fund itself does differ from many others as their fund comprises at least 98% holdings in the form of equities (shares). In comparison, many KiwiSaver growth funds hold around 75-80% in equities (shares) and high-growth assets. With such a large holding of the fund in equities, this fund has the potential to see some good returns but, on the contrary, has a large amount of risk attached.
What does this mean for your KiwiSaver plan?
Fees can be a driving factor when choosing a KiwiSaver provider, which is very understandable. However, due to the underlying nature of Kernel Wealth's KiwiSaver scheme being solely a growth fund that allocates 98% into equities (shares), they have advised this KiwiSaver plan to be for long-term investment (7+ years) as it will likely endure many ups and downs in the short-term due to the nature of volatile growth funds.
Kernel Wealth has only one fund option, thus being the growth fund however they are looking to expand and release conservative fund (low-risk) options shortly, which may better suit some people.
Where Kernel Wealth may not be right for you?
Kernel Wealth KiwiSaver fund is a high-growth fund designed for long-term investors and those prioritising low fees. However, if you are looking to buy a first home shortly or are nearing retirement, this fund may not be for you. This is because this fund is directed at long-term investors due to its aggressive investment strategy that potentially may cause your KiwiSaver to endure more ups and downs in the short term.
How can National Capital help?
National Capital can help inform you on which Kiwisaver funds and providers will best suit your specific situation. If you feel unsure about your current situation and KiwiSaver Fund, you can complete a KiwiSaver Healthcheck. Completing a Healthcheck will allow you to reach your financial goals and receive KiwiSaver advice tailored to you.
National Capital advises New Zealanders on over $70 million of their KiwiSaver savings. For more information, visit www.nationalcapital.co.nz.