KiwiSaver still as popular as ever

Well over half of private New Zealand investors will be KiwiSavers by June, according to results from the recent ING Investor Dashboard Sentiment survey. As of March, 49% of high net worth New Zealand investors had joined, and a further 22% said they intended to join.

This figure is up from 15% who indicated they intended to join last quarter. This popularity of KiwiSaver is consistent with a FundSource report released yesterday, showing that KiwiSaver net funds under management, which reached $2.27 billion in March 2009, now represent about 15% of the total FundSource reported retail net funds under management, currently standing at $15.31 billion.

ING head of KiwiSaver distribution, David Boyle says, “The changes to the scheme introduced by the government this month will potentially encourage more people to join, even during the economic downturn. Since people are now feeling less willing to spend and more willing to start saving. Lowering the minimum contribution rate to 2% may well regenerate interest from those who previously saw the 4% contribution level as a barrier”.

However, FundSource also reported that the majority of people enrolled in KiwiSaver have their contributions allocated to conservative funds, purely because most people are in default schemes which automatically select conservative funds.