Growth Saver
While you appreciate the greater investment risks involved, your financial situation and personal circumstances enable you to concentrate your savings in those markets which have the greater expected rate of return, without requiring the capital for other purposes. You understand the sensitivity of these markets to short term events and the extent to which the value of your overall capital may vary significantly, as part of the process of seeking superior returns.
A Growth portfolio may comprise 25% income assets (e.g. cash and fixed interest) and 75% growth assets (e.g. Australasian, global and property equities).
The following sample asset allocation, based on data sourced from Melville Jessup Weaver, an actuarial consultant to the Summer KiwiSaver scheme, can be used as a guide in constructing a Growth portfolio.
| Asset type | Sample allocation % |
|---|---|
| New Zealand and Australian equities | 24.0% |
| New Zealand property equities | 8.0% |
| Global equities | 43.0% |
| Total growth assets | 75.0% |
| New Zealand fixed interest | 10.0% |
| Global fixed interest | 10.0% |
| Cash | 5.0% |
| Total income assets | 25.0% |
| Total portfolio | 100.0% |
Risk indicator
The Financial Markets Authority has provided guidance on indicators which can help describe investment risk. These indicators are based on annualised standard deviations, a mathematical measure of risk.
On a scale of 1 (least risky) to 7 (most risky), the investment risk of the asset sectors can be described as follows:
| Asset sector | Risk Indicator | |
|---|---|---|
| Cash | 1 | Very low volatility |
| Fixed interest (New Zealand) | 2 | Low volatility |
| Fixed interest (Global) | 3 | Low to medium volatility |
| New Zealand equities and New Zealand property equities | 4 | Medium to high volatility |
| Global equities | 5 | High volatility |
| Australian equities | 6 | Very high volatility |
