Closure of the NZ Property Fund
The short version
- We're closing the NZ Property Fund in the Kōura KiwiSaver Scheme on 10 December. From 9 November it is no longer open to new investment.
- You have until 9 December to choose where your Property Fund money goes. There's no switch fee.
- If you do nothing, we'll move it into the Core Growth funds you already hold, in the same proportions.
- Your split between growth and income assets stays the same.
- We're closing it because of concerns about retirement villages, its overlap with our NZ Equities Fund, and its size.
Why we're closing the NZ Property Fund
This was a difficult decision, made for three reasons.
Concerns about retirement villages
Retirement village operators make up 32% of the fund. The sector is dealing with rising staff costs, more regulation and a very flat property market, and we don't expect that to change soon. If we removed these companies and kept only listed property companies, the fund would hold just 8 companies. That's too few to give investors proper diversification.
You already own these companies
Every one of the 11 companies in the Property Fund is also held in our NZ Equities Fund, where together they make up about 10% of the fund. We think investors are better off getting property exposure as part of a broader New Zealand share portfolio than holding it as a separate bet.
The fund hasn't reached the size it needs
For a property fund to work well over the long term, it would need to hold private property as well as listed companies. Given the fund's size and our current recommendations, we don't think it's likely to get there. We believe members are better served by bringing this investment together in one place, and over time we may look at whether private assets have a role in our NZ Equities Fund.
The timeline
| Date | What happens |
|---|---|
| 9 November | The fund is removed from the Kōura app and sign-up. Everyone invested in it is notified. |
| 9 Nov to 9 Dec | We send reminders. You can switch your Property Fund money to any fund, with no switch fee. |
| 9 December | Last day to choose where your Property Fund money goes. |
| 10 December | The fund closes. Any money still in it is sold and reinvested in your Core Growth funds. |
What you can do
Choose for yourself
By 9 December, open the Kōura app or log in online and switch your Property Fund holding to any fund or mix you prefer. There's no fee. Allow for our rule of 5 days between switches.
Do nothing
On 10 December we sell your Property Fund units and spread the money across the Core Growth funds you already hold, in the same proportions you already hold them.
How the reinvestment works: an example
Say you have $10,000 in KiwiSaver, with 3% ($300) in the Property Fund. Your Core Growth funds (NZ Equities, US Equities, Rest of World, Emerging Markets and Strategic High Growth) hold $7,700 between them. Each one receives a share of the $300 in proportion to its size.
| Fund | Before | Share of Core Growth | Receives | After |
|---|---|---|---|---|
| US Equities | $3,000 | 39.0% | +$116.88 | $3,116.88 |
| Strategic High Growth | $2,300 | 29.9% | +$89.61 | $2,389.61 |
| Rest of World Equities | $1,100 | 14.3% | +$42.86 | $1,142.86 |
| NZ Equities | $800 | 10.4% | +$31.17 | $831.17 |
| Emerging Markets Equities | $500 | 6.5% | +$19.48 | $519.48 |
| Fixed Interest | $2,000 | – | – | $2,000.00 |
| NZ Property | $300 | – | ($300.00) | $0.00 |
| Total | $10,000 | $0.00 | $10,000.00 |
Questions
Is there a cost to switching out of the Property Fund?
There's no switch fee. A switch sells your units at the unit price on the day, so the amount you move depends on market values at that time. Our usual rule of 5 days between switches applies, so leave yourself time before 9 December.
What if I only hold the Property Fund and no Core Growth funds?
Your Property Fund money is shared across the other funds you hold, in proportion to your current mix. If you'd rather choose, switch by 9 December.
Will Kōura launch another property fund?
We have no plans to launch a replacement at this stage.
Does this change my risk level?
Your split between growth and income assets stays the same, because Property Fund money moves into other growth funds. The mix within your growth assets does change: you will hold more shares and less listed property, and each fund has its own risks. The risk indicator for each fund is in the Product Disclosure Statement.
Should I get advice?
This page is general information and doesn't take your circumstances into account. If you're unsure which funds suit you, talk to a financial adviser or call us before you decide.