New Simplicity Investment Funds could save Kiwis $1/2 billion annually in fees

This week, Simplicity Investment Funds opened three passively managed funds Conservative, Balanced and Growth to investors. It will charge a $30 a year plus a 0.31% investment management fee, exactly the same fee it charges for its KiwiSaver funds. These fees are 50-75% lower than the market, depending on the amount invested. For someone investing $50,000 a year in a growth type fund, the savings could be more than $7,000 over 10 years, says managing director Sam Stubbs.

“It’s about time Kiwi investors had access to diversified funds that charged only what it costs, no more,” he said.

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

Simplicity Investment Funds exactly mirror the investments of its KiwiSaver funds. Each will have over 5,000 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.  Investors will be able to withdraw their money at any time.