Investors' search for returns overrides any market concerns, survey shows

New Zealanders haven’t let Covid-19 put them off investing, new research shows.

Tuesday, July 7th 2020, 6:35AM

Kiwi Wealth’s State of the Investor Nation survey found that a significantly higher proportion of New Zealanders had investments or savings in June compared to February, at 84% compared to 80%.

A year earlier it was 79%.

In total, 22% had made changes to their investments in the past three months compared to 25% who made changes through the full year to February.

Melissa Vasta, general manager of retail and product at Kiwi Wealth said people were putting their money into investments rather than reducing them.

“In fact, fewer were withdrawing money from their investments compared to February. That shows people have been paying attention to their investments. The critical thing is are they making good decisions to achieve their financial goals?

“This is especially true for people in KiwiSaver. For many it’s their primary investment vehicle outside of the home, so they would have been nervous watching their balances drop during the market turmoil.

“The worst thing most could do was change their fund during a market downturn, as that guarantees a loss in real dollars. That’s where the skills of the provider come in, to ensure members are in the correct fund and to help them understand that KiwiSaver is a multi-decades-long investment. Navigating market volatility is the price paid for strong returns this past decade, far greater than could be achieved through term deposits or savings accounts.”

KiwiSaver and savings accounts were still the most popular asset classes in 2020, although a significantly lower proportion of investors had money in term deposits this year.

Kiwi Wealth recorded an increase in the popularity of equities as New Zealanders chased higher returns.

“Across the board New Zealanders are more open to investing in a range of asset classes in 2020. The biggest changes exist around equities, where a significantly lower proportion of Kiwi investors say they wouldn’t consider investing in managed funds and shares in companies.”

This year, 15% said they wouldn’t consider shares compared to 18% last year.

Investors had the most wealth in residential property, followed by commercial property, then unit trust and managed funds. The mean portfolio size had increased by $2,245 to $193,752.

Tags: investment kiwi wealth KiwiSaver