New To Nikko AM KiwiSaver Funds? Here's Your Guide

Date Feb 16, 2021
Blog category Kiwisaver
By Sieg C

Nikko Asset Management New Zealand may be fairly new, but they're already changing the landscape, thanks to their value-added products and services. Learn more about their innovative approach to KiwiSaver in this article.

With all the KiwiSaver funds in NZ, how does Nikko Asset Management compare? Do they offer the investment options that fit your needs? How would you know if ARK KiwiSaver Fund is actually the best option for you?

Read this beginner's guide to know more.

Read: All About KiwiSaver: A Quick Beginner’s Guide for Kiwis

Who is Nikko AM NZ?

Nikko Asset Management (AM) New Zealand provides high-conviction, active fund management across a range of Equity, Fixed Income and Multi-Asset strategies.

This comes as no surprise that they offer KiwiSaver schemes as well. They have a line of competitive funds for all kinds of people — whether they like the riskier, high-yield route, or slow and steady investment options.

What are associated fees with Nikko AM NZ?

In every KiwiSaver scheme, there are fees associated with your investment — and the same goes for Nikko AM NZ. Fees are deducted directly from your investment, which will reduce your returns. If you choose to invest in many different funds, there are also several fees you may need to be aware of as well.

Your fees will be charged in two ways: regular charges and one-off-fees. All running fees and expenses include GST wherever applicable.

Management fees

Management fees are costs that Nikko AM NZ charge you for managing your funds. This includes management of your asset, investment, supervision, and administration. Administrative costs are made up of audit fees, registry services, and unit pricing.

Performance-based fees

Performance-based fees are payable where return is above the hurdle rate. Hurdle rate is the minimum return of the fund before you’re charged the performance-based fee. Depending on the fund, it greatly varies in value.

This also applies where the value of the fund exceeds relevant high-water mark. High-water mark is the value of your fund before the manager charges the performance fees. It ensures that you can make up for the losses if your fund decreases in value over time. 

Buy and sell spreads

Buy/sell spreads ensure that the investor pays the cost of transaction of buying and selling units, and not the other units in the fund. These are specific costs incurred when securities are bought and sold.

Buy/sell spreads differ depending on the fund and may change from time to time. It always reflects the latest brokerage fees and market conditions.

Membership fees

Membership fees are calculated at a rate of $2.50 per member based on the calendar month. It’s used to pay for administrative proceedings of your account. Note that there are also other annual charges associated with your membership.

It's always up to you. Compare and choose the right KiwiSaver fund for you, right here at glimp!

What is ARK Disruptive Innovation Fund?

ARK Disruptive Innovation Fund is a managed investment scheme by Nikko AM NZ. They also offer this as a KiwiSaver Scheme. It aims to disrupt the competition by giving New Zealanders more choices and freedom in their portfolio.

It introduces people to a wide range of investment opportunities for global tech companies involved in robotics, artificial intelligence, genome sequencing, energy storage, internet technologies, automatic vehicles, among many others. 

It's important to note that ARK Disruptive Innovation Fund is independent of the ARKK Exchange Traded Fund (ETF), and all the other ARK ETFs such as ARK G and ARK X listed in the US.

However, ARK Investment Management LLC (ARK Invest) is Nikko AM's appointed investment adviser and provides a model portfolio for them.

ARK Invest is a widely acclaimed company, with recognition from Bloomberg. Their CEO/CIO, Catherine Wood, is one of the most important figures in the financial world. You can get access to and transfer/manage your invested funds through Nikko AM's platform, GoalsGetter.

What is GoalsGetter?

GoalsGetter is Nikko AM's online investment platform. It's an award-winning company, committed to delivering the best of both local and global investment solutions among Kiwis. With their expertise and wide reach (Nikko AM is one of the largest asset managers in Asia), they’re trusted by the biggest financial institutions, including insurance companies and charities. 

As an investor, you can fully trust GoalsGetter to help you achieve your financial objectives. They do their best to grow your money in the best possible way, and according to your needs and financial situation.

Read: Best Investment Apps in New Zealand

How does ARK Disruptive Innovation Fund work?

ARK Disruptive Innovation Fund is a managed investment scheme. Your money will be pooled along with other investors. Nikko’s trusted financial advisors decide on the direction of your investment fund depending on the performance of the market.

As with any investment, it can always go up or down. The great news is, you can trust Nikko’s team consists of experts and professionals that will help you grow your investment portfolio effectively. They also have a range of investment options to suit your needs.

What are the other KiwiSaver funds available with Nikko AM?

Nikko AM NZ offers eight different funds. Each one has different objectives and risks, and it’s important to know these factors to get one that fits your needs. These schemes are portfolio investment entities (PIE) and are taxed depending on the prescribed investor rate (PIR).

Conservative Fund

Conservative fund is a diversified portfolio, focusing on lowering the risk assets. It aims to achieve a return of over 1% p.a in three years before fees, running costs, and taxes.

  • Annual fund charges: Estimated 0.73%
  • Management fees: 0.60%
  • Buy/sell spreads: 0.04%/0.04%
  • Performance-based fees: Estimated 0.13%
  • Volatility: Low to medium

Balanced Fund

Balanced fund is a diversified portfolio, aiming to balance the lower and higher risk assets. Its objective is to achieve a return of over 1.5% p.a. in three years before fees, running costs, and taxes. 

  • Annual fund charges: Estimated 0.98%
  • Management fees: 0.70%
  • Buy/sell spreads: 0.09%/0.09%
  • Performance-based fees: Estimated 0.28%
  • Volatility: Medium to high

Growth Fund

Growth fund is a portfolio of short-term bonds, deposits, and cash. It focuses on creating a diversified portfolio through higher-risk assets. It aims to achieve a return of over 2% p.a. in three years before fees, running costs, and taxes.

  • Annual fund charges: Estimated 1.13%
  • Management fees: 0.95%
  • Buy/sell spreads: 0.13%/0.13%
  • Performance-based fees: Estimated 0.18%
  • Volatility: Medium to high

NZ Cash Fund

NZ cash fund generates income through short-term deposits, bonds, and cash while keeping the value of your capital. It aims to outperform Bloomberg NZBond Bank Bill Index by 0.2% p.a. over three months before running expenses, fees, and taxes.

  • Annual fund charges: Estimated 0.45%
  • Management fees: 0.45%
  • Buy/sell spreads: 0%/0%
  • Performance-based fees: None
  • Volatility: Extremely low

NZ Corporate Fund

NZ corporate bond fund is a portfolio of bonds, deposits, and cash, aiming to generate income while preserving the value of the capital. Its objective is to outperform Bloomberg NZBond Bank Bill Index by 0.7% p.a. over three years before running expenses, fees, and taxes.

  • Annual fund charges: Estimated 0.80%
  • Management fees: 0.80%
  • Buy/sell spreads: 0%/0%
  • Performance-based fees: None
  • Volatility: Low to medium

Core Equity Fund

Core equity fund aims to outperform S&P/NZX 50 Index Gross with imputation credits over three years by 3% p.a. before taxes, running fees, and costs. It gives you access to NZ and AU equity markets through an actively managed portfolio of income and capital.

  • Annual fund charges: Estimated 0.95%
  • Management fees: 0.95%
  • Buy/sell spreads: 0.29%/0.29%
  • Performance-based fees: None
  • Volatility: High

Global Shares Fund

Global shares fund aims to outperform MSCI ACWI by reinvesting the net dividends of 3% p.a. in three years before taxes and running costs. It offers investors with an investment portfolio of concentrated actively managed funds for long term capital growth.

  • Annual fund charges: Estimated 1.15%
  • Management fees: 1.15%
  • Buy/sell spreads: 0.07%/0.07%
  • Performance-based fees: None
  • Volatility: High

Option Fund

Option fund invests your money in cash and fixed interest investments. It aims to outperform Bloomberg NZBond Bank Bill Index by 4% p.a. over three years before running expenses, fees, and taxes. It earns income from selling options based on the global government bonds. This fund works best with experienced investors.

  • Annual fund charges: Estimated 1.15%
  • Management fees: 1.15%
  • Buy/sell spreads: 0%/0%
  • Performance-based fees: None
  • Volatility: Extremely high

Read: Start Young, Start Now: Investment Options In New Zealand

How can you transfer with Nikko AM NZ?

As with any other KiwiSaver scheme, transferring your funds with Nikko AM NZ is quick and easy. You must secure a minimum amount of $250 to switch, but this may still be subject to change for whatever reason.

Switches are limited to only 12 per year. Unless you’re switching completely, at least $250 must remain in your account. Note that a switch works like a withdrawal, meaning that buy/sell spread may apply. 

Is ARK Disruptive Innovation Fund the best for me?

ARK Disruptive Innovation Fund is an aggressive investment option. If you want to grow your money to greater heights at a fast pace, this fund is a great option for you. The great thing is, Nikko AM NZ offers plenty of options, including a conservative option. It's always up to you in choosing the best way to grow your money.

Read: Five Tips for Choosing the Right KiwiSaver Scheme

Find out if ARK Disruptive Fund is the right choice for you by comparing them against the best schemes in New Zealand. Sign up for the best KiwiSaver scheme by using our comparison tool, right here at glimp!

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