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Simplicity to launch lookalike KiwiSaver funds


Simplicity launches new KiwiSaver-lookalike product with massive fee savings

Simplicity unveiled plans today to branch into the investment funds sector, offering funds that operate outside of the KiwiSaver plan, but with fees at a fraction of the industry price.

Simplicity Investments Funds, , will be managed the same way as its Kiwisaver plan but investors will be able to withdraw their money at any time. On average, fees will be 50-75% lower than the industry average, depending on the amount invested. (See chart attached).

If Simplicity’s savings were applied to the $40 billion Kiwis have invested in managed investment schemes, they would save close to half a billion a year in fees.

“It’s about time Kiwis had access to funds that charged only what it costs, no more,’’ said managing director Sam Stubbs.

Simplicity Investment Funds ( Conservative, Balanced and Growth), will have the same fees. Each fund will have over 7,000 investments in 23 countries, and be fully hedged to the New Zealand dollar. Overseas investments will be managed by Vanguard, the world’s second largest asset manager.

As with it’s KiwiSaver, all funds exclude investments in nuclear weapons, cluster bombs, mines and tobacco.

Stubbs says Simplicity’s Investment Funds will do for the managed funds sector what Simplicity has done for KiwiSavers.

“The savings implications for investors are significant.

“A Kiwi with $50,000 invested in our growth fund over 10 years could be more than $10,000 better off than the average fund, all other things being equal,” he said.

“Fees for KiwiSaver funds are already way too high, and managed investment schemes are even worse. Some are just outrageous, reflecting old ways of managing money and sales tactics which belong in the last century,” he said.

“As a nonprofit, 100% online manager, we are here to provide easily understood, diversified funds to ordinary Kiwis, so they can increase their wealth. It’s as simple as that,” said Stubbs.

The launch of these funds has been brought forward by 12 months due to demand.

“About one in five of our KiwiSaver members have asked for an option that allows them to withdraw money at any time. They don’t get the member tax credit or employer contributions that KiwiSaver offers, but the freedom to withdraw is important for them.

We think these will appeal to a very wide range of investors due to their ultra low fees, diversified investment, and a non profit manager they already trust.”

As per it’s KiwiSaver funds, Simplicity will donate 15% of its management fees to charity.

Registrations of interest will commence today (March 6th) and we’ll be accepting funds from April 3, 2017. The minimum initial investment is $10,000.

For questions, and or comment, please contact Sam Stubbs at 021 491547.

Quick facts Simplicity Investment Funds
Simplicity fees are 50-75% cheaper than the average diversified investment fund currently in the market.

Conservative Fund fees range from 0.97% to 2.38% p.a. (Simplicity Fees: 0.31% + $30 p.a.)

Balanced Fund fees range from 1.16% to 2.75% ( Simplicity Fees: 0.31% + $30 p.a.)

Growth Fund fees range from 1.25% to 2.93% ( Simplicity Fees: 0.31% + $30 p.a.)

The immediate growth fund fee saving on a $10,000 investment is $117.00 p.a. After 5 years this saving grows to $585.00, and after 10 years is $1,170.00

The immediate savings for a $50,000 investment in the growth fund are $705.00, $3,525.00 and $7,050.00 respectively.

No performance fees, 15% of the management fee earned goes to Charity All funds have more than 9,000 investments in 23 countries and are 100% hedged to the NZ dollar.

Offshore investments managed by Vanguard, the world’s second largest asset manager.

Government owned Public Trust is the custodian and supervisor.

Click for big version.

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