1000 JUNO KiwiSaver members benefit from scheme
Tuesday 30 October, 2018
1000 JUNO KiwiSaver members benefit from actively managed scheme as global markets fall.
A KiwiSaver member saving thousands a year in fees is just one of 1000 New Zealanders to have joined the JUNO KiwiSaver Scheme in its first 12 weeks.
“This member transferred his balance of $650,000, and we calculated for him that based on the average fee of other providers’ Growth Funds of 1.25%*, he would have been paying in the vicinity of $8,125 in management fees alone,” says JUNO KiwiSaver Scheme co-founder Mike Taylor. “Compare that to JUNO’s flat fee of $600 a year and we could be saving that member approximately $7,525 in fees in his first year with us alone.”
The JUNO KiwiSaver Scheme is a collaboration between JUNO Investing Magazine and Pie Funds Management Limited. Since its launch on 1 August 2018, it has attracted a diverse clientele – experienced investors with large balances, first-time KiwiSaver members and young people (one in three members is under 18). With momentum continuing to build, around 100 members have been joining JUNO each week.
“We’re having daily conversations with KiwiSaver members who’ve been in another scheme for years, but had no idea what they were paying in fees,” says Mike. “Or they’ve understood they were paying just a few dollars in administration charges when really they’ve been shelling out hundreds or thousands more in management fees as well.”
“Those New Zealanders like that we’re completely upfront about what we charge, and that what we charge is low - or, in some cases, absolutely nothing. They also tell us they like our transparency about where and how we invest, and our active approach to fund management. It’s that management style, and our decision to hold very high cash levels for the moment – currently over 60% across all funds – that has helped cushion our members from the current market sell-off that has seen stock markets around the world plummet 10-15% in the past month.”
JUNO’s fees start at zero – kids under 18 and those with balances under $5,000 don’t have to pay a single cent to be invested in KiwiSaver.
For adults and those with larger balances, fees are charged in a dollar amount, not a percentage of the investment. Percentages are confusing for members, says Mike. “You might look at a document saying you’ve paid one percent or 1.25 percent in fees, but you have little idea what that means. It can be difficult to comprehend that potentially thousands of dollars are being sucked out of your account, each and every year.”
For fee-paying JUNO members, fees begin at $5 a month and are paid monthly – just like Netflix or Spotify.
Co-founder Jacqueline Taylor, who launched the scheme with her husband, says she’s thrilled to see members engage more fully in KiwiSaver and is particularly interested that over 86% of JUNO members are investing in the JUNO Growth Fund. “Our members are spending more time thinking about and understanding their options. We can see we’re bucking a national trend too, with only 3% of our members in Conservative. That’s really exciting, because it means our members are understanding their appetite for risk and putting their faith in our active management style. In some cases, we’re switching full families – we recently transferred all six members of one Kiwi family into JUNO. That’s potentially hundreds of dollars saved every month for them.”
JUNO members should also benefit from two recent developments: the appointment of Glen Macann, back in New Zealand after running superannuation schemes in Australia, as Head of JUNO Group; and parent company Pie Funds opening a new London research office.
Glen says having a European presence will further improve the international investment ideas available to the JUNO funds. “We are an active manager and that style benefits from being in the markets we invest in and close to the companies we invest in.
“Establishing a London office demonstrates our commitment to truly active investing and we believe it gives us a distinct investing edge, to benefit our members.”
*FMA KiwiSaver Tracker management fee data at 30 June 2018