Moneyworks NZ Limited Investment Philosophy

Investment Objectives and Risk Management
Investment Cash Flow Objectives

At Moneyworks, we aim to build portfolios that will maximise the chance that clients will meet their long term cash flow objectives. In other words, we aim to minimise the risks that our clients need to take.

Investment Capital Preservation 
In terms of risk management, the key aspect is to ensure capital is preserved in the medium term.

Investment Risk Management

Investment Risk Profiling:
The first step to risk management is to determine the level of risk that is appropriate for any particular investor. We do this by using risk profiling tools and having a discussion with each investor about those results.

Investment Diversification:
After that level of risk is adopted, it is important to make sure that the portfolio is appropriately diversified at all time.

Investment Monitoring:
By monitoring market valuations, we expect to be able to avoid some, but not all major market downturns by reducing portfolio exposure to risk assets when they appear overpriced.

Investment Asset Allocation

At Moneyworks we believe that broad swings in markets can be anticipated and use Dynamic Asset Allocation to add value and reduce the risk of portfolios. In order to successfully implement active asset allocation, we access a range of information including research such as Farrellys, Morningstar and Lonsec, in addition to our experience.

Investment Asset Classes and Currency Management, Active
Investment Management

At Moneyworks we believe that markets are not efficient and it is possible to beat index returns after fees. We believe that superior active managers that will beat the index can be identified. This is as a result of the strategy, conviction, active management, skills of individuals and philosophy of the investment manager.

Currency Management

At Moneyworks we believe that currency on individual portfolios should be fully unhedged, as it is difficult if not impossible to predict currency movements and because being unhedged provides the optimal level of diversification. However, individual fund managers may elect to add hedging of currency to their investment strategy within their fund.

Investment Liquidity

A small exposure to relatively illiquid assets is fine if the investment opportunity is attractive enough. In a long term portfolio it is unnecessary for all assets to be liquid at all times.

Alternative Investments

Advisers at Moneyworks will only recommend investment in alternative investments if we really understand the opportunity including the risks, what is likely to drive sustainable returns, the fees, and potential for illiquidity. Few investment offerings pass these tests.

First and Second Tier Debt Issues

A core belief of advisers at Moneyworks is that having secure debt (first tier debt) in a portfolio is necessary to provide stability in a downturn and a guaranteed source of income. We do not take risks with this part of the portfolio.

At Moneyworks we do recommend securities with credit risk (second tier debt) in portfolios to take advantages of the high premiums over and above the secure debt (first tier debt) from time to time. When the premiums are insufficient, we will ignore this asset class.

Taxes and fees

At Moneyworks we believe that no investment should be made for tax optimisation reasons only. But, if all else is equal and we are comparing two options where one has a preferable tax environment, we will most likely choose the option with the best tax situation for the investor.

Advisers at Moneyworks consider after fee outcomes. Fees should not drive decisions as long as they are more than offset by the value created by active management.

Ethical Investing – how do we know what our fund managers are doing?

There are a number of factors that we take into account in our process, which will be built on over time. 1.    Are the Fund Managers Signatories to UN PRI and or/RIAA 2.    What publishedRead more

Ethical Investing – the different terminologies

Ethical Investing is the short hand for many different types of approaches to understanding what and how the companies that you are investing in are carrying out their business. Since the IndustrialRead more

Ethical Investing – Moneyworks approach

Since 2017 Moneyworks have been analysing the ‘ethical investing’ approach that the fund managers that we recommend take.  Having investments that don’t ‘do bad’ is important to us atRead more

Lost’ Australian Super – first steps to change legislation so that this can be transferred to a New Zealand KiwiSaver (thanks to Chapman Tripp)

Australian ‘unclaimed super’ money gap to be plugged (10th June 2020 – Brief Counsel) The Taxation (Annual Rates for 2020/21, Feasibility Expenditure, and Remedial Matters) Bill, introduced toRead more

Changes to KiwiSaver this year

There have been a number of changes to KiwiSaver this year.  Some of these changes took effect on 1 April 2020: · All members aged 65 years or over can make a retirement withdrawal ·Read more

Things you may not know about KiwiSaver

1.    Get regular withdrawals from your KiwiSaver to fund your retirement spending When you reach the age of eligibility for New Zealand Superannuation (currently 65), you can access yourRead more

What does the ‘KiwiSaver Retirement Projection’ on your KiwiSaver Statement mean?

If you are aged between 18 & 64, from this year, you will receive some more information on your annual KiwiSaver Statement.  This ‘Retirement Projection’ information is a legislativeRead more

It really isn’t possible to ‘time’ the markets – investors with $1.4 billion in KiwiSaver funds learned this in March

When we meet with our Membership Fee clients on an annual basis, we consider the risk profile that their investments are invested in.  As your life changes, this may change.  We encourage our nonRead more

Coronavirus world, economic outlook and investments

This is a newsletter that was sent out on Monday May 11th 2020, to Moneyworks Financial Planning and Investment Clients that we work with on an ongoing basis.  It has quite a lot of interestingRead more

FIF/FDR Tax Regime on Overseas Investments

If you are liable to this tax regime (Your adviser will have told you, and your tax report will have a section with calculations on it as shown below), it is IMPORTANT that you read this guidance.Read more

PIE Tax

Your KiwiSaver and some other investments may be liable to PIE Tax. A PIE is a Portfolio Investment Entity. PIE Tax calculations are quite complicated – the important thing that you need to know isRead more

Tax Adjustments/Package available for indviduals and businesses under the Covid-19 Crisis Environment

The NZ Government has been using the tax system to provide assistance to people and businesses to deal with the Covid-19 Lockdown.  We have outlined the benefits announced to date below. There is aRead more
 

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