Kiwi Wealth KiwiSaver Scheme Review

​Updated: August 2018
TLDR Review Summary of Juno KiwiSaver
  • JUNO KiwiSaver offers three KiwiSaver funds, with the aim of making market-beating returns while making it simple for contributors to understand where their money is invested and how their retirement is being funded.
  • Most KiwiSaver schemes have two fees - an annual fee, and a management fee. JUNO KiwiSaver instead, and rather helpfully, has ONE fee and it's in dollar terms, not as a percentage of your fund balance. This means you'll pay a fixed amount per month (or nothing if your balance is below $5,000).
  • There are no performance fees, despite the funds being actively managed. Many KiwiSaver fund managers take a bite of any market-beating returns - JUNO KiwiSaver does not.
  • Switching between any JUNO KiwiSaver fund is free. There are no joining fees or exit fees if you take your money to another fund.
Read this First: Fees, Performance and Understanding What's Best For Your Situation
A lot of media attention focuses on KiwiSaver fees, but this is only one thing to consider when picking the most suitable provider and fund for your retirement needs. Being comfortable with what you're investing in is the most important aspect of saving for your retirement. 

With three fund options available and a public commitment to make fees and underlying investments transparent to investors, JUNO KiwiSaver offers investors fixed-fee flexibility with actively managed funds aiming to beat the market.  

Our Review 
In this guide, we outline what the JUNO KiwiSaver scheme is, what funds they offer to KiwiSaver members and how they're different to other funds, as well as looking at alternatives and the level of fees involved.
 
Please note: MoneyHub is not a Financial Adviser, and this guide has been published to explain the investment fundamentals and outline the pros and cons of JUNO KiwiSaver as a KiwiSaver investment option.
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This Guide covers:

JUNO KiwiSaver Fees

Fees are charged monthly and range from $0 to $50 (or $0 to $600 per year). The same fee is charged for the three funds - Conservative, Balanced and Growth. The larger your fund, the more you'll pay per the schedule below.

The bad news is that someone with a $5,000 fund will pay the same monthly fee as someone with a $20,000 fund. While this may seem unfair to smaller investors, the general idea is that your KiwiSaver fund is a long-term investment and you will benefit from having an actively growing balance which smooths out such imperfections in the fee structure.
KiwiSaver Balance (at month end)
Monthly Fee
Annual Fee (Monthly Fee X 12) 
Under 18 or balance of under $5,000
Free
Free
​$5,000 - $24,999
$5
$60
$25,000 - $49,999
$15
$180
$50,000 - $99,999
$25
$300
$100,000 +
$50
​$600

THE SPECS of the JUNO KiwiSaver Funds and where your money is invested

  • Pie Funds Management Limited, a fund manager, is the manager of three JUNO KiwiSaver funds.
  • Because the funds launched in August 2018, there is no past performance data.
  • The three funds have distinct investment profiles:
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1: JUNO Conservative fund.
  • Risk factor: 3
  • Expected annual return: 2%-5%
  • Minimum suggested investment timeframe: 3 years

Investment Composition:
  • Cash and cash equivalents 65%
  • International equities 25%
  • International fixed interest 10%

The Conservative fund aims to "preserve capital with some growth, and invests primarily in cash and cash equivalents (such as term deposits). It also investments in international fixed interest, some equities and some additional cash exposure. 

JUNO's suggested investor profile is someone with a "short-term investment horizon or low comfort with investing, and (looking) to achieve a better return than they could from choosing their own term deposits with a New Zealand bank". 
We say: This is JUNO KiwiSaver's least aggressive fund, with 75% of your money being invested in term deposits with New Zealand and international financial institutions holding high credit ratings. 25% of your money is allocated to an active investment manager picking shares that are expected to increase in value. 

2: JUNO Balanced fund.
  • Risk factor 4
  • Expected annual return: 5%-10%
  • Minimum suggested investment timeframe: 5 years

Investment Composition:
  • Cash and cash equivalents 20%
  • International equities 60%
  • International fixed interest 20%

The Balanced fund aims to provide "steady capital growth, and invests in international fixed interest as well as the JUNO Growth Fund (below), and offers equities and cash exposure.

JUNO's suggested investor profile is someone with a "medium-term investment horizon (or a longer horizon, but low comfort with investing)". 
We say: This is JUNO KiwiSaver's 'middle of the road' fund, giving investors a mix of conservative investing and riskier growth. 60% of your money allocated to an active investment manager picking shares that are expected to increase in value. 40% of your money is invested in term deposits with New Zealand and overseas financial institutions that hold high credit ratings. 

3: JUNO Growth fund.
  • Risk factor 4
  • Expected annual return: 10%+
  • Minimum suggested investment timeframe: 10 years

Investment Composition:
  • Cash and cash equivalents 20%
  • International equities 80%

The Growth fund aims to provide investors with "capital growth", generated by investments in "international equities with a focus on globally-known brands, along with a cash exposure". 

JUNO's suggested investor profile is someone with a "longer-term investment horizon and who is comfortable with investing". 
We say: This is JUNO KiwiSaver's most aggressive fund, with 80% of your money allocated to an active investment manager picking shares that are expected to increase in value. 20% of your money is invested in term deposits with New Zealand financial institutions holding high credit ratings. 

Summary
The three funds all invest in income and growth assets; the higher the proportion of equity investments, the more aggressive the fund and the expectation of a higher return. As with any fund, past performances do not indicate future results, but generally the characteristics of how each fund behaves remain the same. 

JUNO KiwiSaver - WHAT YOU NEED TO KNOW

Claims made by JUNO KiwiSaver
​"Most KiwiSaver schemes charge fees as a percentage of your total investment, so for every dollar your investment grows, so does the amount you pay in fees. But with us, you can see exactly what you will pay at all stages of your KiwiSaver journey".
AND
"With JUNO KiwiSaver, you can see exactly what you will pay at all stages of your KiwiSaver journey."
Is it true?
  • Yes - the fee buckets are fixed, meaning you'll see a monthly fee of either $0, $5, $15, $25 or $50. This differs from other KiwiSaver providers who charge a percentage of your average daily fund balance, calculating a (less round) number that is rarely the same month to month.

"Pie funds (which manages the JUNO KiwiSaver funds) was an active manager, with (the team) using their skills to try to deliver a higher return than the market."
Is it true?
  • Yes - ​the manager is Pie Investments, which is an Auckland-based asset manager with around $800m in funds under management. The Pie investment managers pick individual shares in markets around the world that they believe will increase in value. 

"JUNO KiwiSaver would focus on educating the investors in the scheme."
Is it true?
  • We hope so, but as the scheme is in its infancy, we can't determine the plans or comment on what resources will be available. JUNO's publisher has advised that the quarterly magazine will be distributed to every JUNO KiwiSaver member.

"Parents can open a Juno KiwiSaver Scheme account for their children fee-free.”
Is it true?

Who is JUNO KiwiSaver Suited To?

With free fees for anyone under 18 or with a balance of less than $5,000, JUNO KiwiSaver is immediately attractive to students and anyone working for the first time. At 3% employer contribution rate, and a 3% individual contribution, a $5,000 balance in KiwiSaver represents around $80,000 of earnings (without considering fund growth). This could mean 2-3 years of free KiwiSaver for new graduates, and many more years for university students working part-time. 

If you're looking for an actively managed fund supported by traders and analysts, the both the Balanced and Growth funds may meet your expectations. 
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Standout Features:
  1. The free fees for anyone with less than $5,000 in their fund - with KiwiSaver reporting that the average balance for 'millennials' is $8,500, there is a lot of opportunity for new members to save on membership fees, and certainly in the beginning of their KiwiSaver journey.
  2. For those with large balances, the fixed-fee subscription nature means a $500,000 balance would incur a 0.12% annual fee - the lowest in the market for a fund of that size.
  3. It's free to change funds; the monthly membership fee means you can move between funds as often as you like.
  4. Fees are low - all three funds have annual fees of between 0.00% and 1.20% depending on what is invested.
  5. The scheme has pledged to be an ethical investor, following Pie Funds' policy, meaning companies trading in weapons, tobacco, gambling, nuclear and other “unethical” business will be avoided.

Be aware:
  1. As with any investment, markets go up and down. The Dotcom bubble in the early 2000s sank global sharemarkets, as did the 2008 Global Financial Crisis. While many global sharemarkets are now at record highs, this is no guarantee of future earnings.
  2. The funds are new, and while their manager, Pie Funds, is an experienced diversified asset manager, the individual KiwiSaver funds have no performance data.
The Bottom Line
  • Overall, JUNO KiwiSaver delivers on all it promises and is a refreshing entrant to the KiwiSaver market.
  • The funds are designed to allow investors to easily understand where their money is invested, and how much it costs on a monthly basis. The scheme is unique in its subscription model - investors can easily comprehend that if their balance is $20,000 they'll pay $5 a month for the fund, for example.
  • The are no joining fees, no exit fees, no performance fees and you can transfer between funds for free as many times as you want. 
  • The funds are active funds, and unlike Simplicity, for example, do not follow or recreate a benchmark of a sharemarket index. Pie Funds' investment managers, who run the JUNO KiwiSaver scheme, will regularly pick undervalued equities, anticipating that their share price will go up in the short to medium term. This has more risk but also has the potential for greater returns.
  • Depending on your KiwiSaver balance, other funds on other platforms can have cheaper management fees, with an example presented in the table below.
  • For example, the fee difference between Simplicity (0.39%) and JUNO KiwiSaver (0.45%) for a $40,000 balance is 0.06% ($26 per year), or ~$500 over 20 years. However, JUNO KiwiSaver is actively managed meaning it intends to outperform Simplicity which offers funds that track sharemarket performance. No two funds are directly comparable, so it's essential to shop around and compare fund objectives as well as fund fees if you're serious about having the biggest KiwiSaver nest-egg possible.
  • JUNO KiwiSaver may not appeal at first - you may not have heard of the organisation's publication, and the lack of performance data doesn't help in decision making. But, JUNO Investing has two key strengths - a commitment to transparency in fees, and a trusted team behind it by way of Pie Funds.
  • In terms of risk, each fund has a risk number (1 = lowest, 7 = highest). The Conservative fund is rated 3; both the Balanced and Growth funds are rated 4 given the higher proportion of money invested in shares and not cash investments. 
Fund Fee Comparison: How JUNO KiwiSaver compares alongside Simplicity and SuperLife
(KiwiSaver balances between $5,000 and $500,000)
Balance
JUNO KiwiSaver​ Annual Fee
Simplicity ​Annual Fee
​SuperLife ​Annual Fee
$5,000
$60 (1.20%)
$46 (0.91%)
$61 (1.21%)
$15,000
$60 (0.40%)
$77 (0.51%)
$122 (0.81%)
$40,000
$180 (0.45%)
$154 (0.39%)
$274 (0.69%)
$100,000
$600 (0.60%)
$340 (0.34%)
$640 (0.64%)
$500,000
$600 (0.12%)
$1,580 (0.32%)
$3,080 (0.62%)
Simplicity Annual Fee: 0.31% of total investment plus a $30 membership fee
SuperLife Annual Fee: 0.61% of total investment (SuperLife AgeSteps fund, 30-49 year old members) plus a $30 membership fee

10 things to know about JUNO KiwiSaver

JUNO KiwiSaver is exclusively for KiwiSaver members

JUNO does not offer non-KiwiSaver products, meaning the ​funds and subscription-fee model offered is only available to KiwiSaver participants. 
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It doesn't matter what your employer's default KiwiSaver provider or fund is - you can select JUNO KiwiSaver and the fund you want

Because JUNO KiwiSaver launched in mid-2018, most employers won't have heard of it, and even fewer will have considered it as a default provider contender. But none of that matters - any KiwiSaver member has the right to pick any one of the 25+ providers and the fund they want. So while JUNO KiwiSaver may be unknown to your employer, you're 100% entitled to pick it as your provider. 
​

There is no minimum investment and it's easy to take contribution holidays

As a JUNO KiwiSaver member, you'll pay the monthly membership fee. This gives you the freedom to invest as you like. And if you want to contribute to your fund at a level above your fixed salary contribution, you can do this by contacting the client services team. 

Dividends your fund(s) receive are reinvested, meaning more cash is invested on your behalf

All three JUNO KiwiSaver funds invest in shares, and many will pay dividends. These cash payments represent the profits from companies returning it to the shareholders, i.e. you. When a company declares a dividend, your fund will receive money and it is re-invested into more shares, growing the value of your fund. Despite being a cash payment, and as is the case with ALL KiwiSaver funds, there is no option to take this money as cash until you turn 65. 

JUNO KiwiSaver offers actively managed funds, and is orientated towards picking market-beating shares

The investment managers, according to the product disclosure statement, "look for a relatively small number of companies it believes the market has mispriced relative to the companies’ outlook...ultimately picking companies it believe are "good quality, with quality not currently recognised by the market; and the market will come to recognise, and appropriately value, their quality".

In simple terms, this means the people who look after your money analyse a range of companies and pick ones they believe are undervalued and have a positive future. By doing this, there is an expectation that the share price will increase, giving a return to the investor when it's later sold. 
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​Signing up isn't Complicated, but you’ll need to decide what fund to invest in first

Signing up to JUNO KiwiSaver is effortless, but you’ll need to decide you fund first. Helpfully, the names of the three funds - conservative, balanced and growth, are free of buzzwords or spin.

Generally, if you're looking for a safe investment with the lowest risk of seeing your original investment fall, a conservative fund could be a suitable option. If you're looking for a higher return and are prepared to have your money in higher risk investments which could fall in value, balanced and growth funds operate in this manner.

If you're not sure of what to invest in and want to have a range of options to pick from, look at Sorted's FundFinder tool which we understand will shortly include JUNO KiwiSaver's funds.
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JUNO KiwiSaver is operated by Pie Funds, an experienced fund manager

With $800m+ of (non-KiwiSaver) money under management, thousands of New Zealanders trust Pie Funds' investment team. The asset manager has a track record of managing ten funds.  While past performance does not indicate future returns, it is clear that Pie Funds operates with the infrastructure and experience to offer professional investment management.

There won't be annual performance data of the funds until August 2019

With the funds having launched in August 2018, there won't be annual performance data until the middle of 2019. The quarterly performances of each fund will start to be released later in 2018, which will build towards the superior metric of annually fund performance.
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JUNO KiwiSaver makes its unique fee and active investment philosophy clear

The subscription-type model indicates JUNO KiwiSaver wants its members to understand the costs of the scheme up front, in dollar terms. 
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None of the three funds invest specifically in New Zealand shares

All three funds invest in shares, but none of these are specifically investing in New Zealand shares, and after seeking clarification from JUNO KiwiSaver's investment management, they confirmed the bulk of the equity exposure will be international.

Our Conclusion​

  • We like that JUNO KiwiSaver offers FREE fees to those under 18 or anyone with less than $5,000 in their fund. This is a New Zealand-first and unrivalled by any other KiwiSaver provider, and we applaud such an initiative. 
  • The three funds don't offer extensive diversity compared to other providers, but we believe the provider wants to simplify KiwiSaver options and not offer a bunch of funds with subtle differences that confuse investors.
  • With a JUNO KiwiSaver fund, investors can get exposure to the New Zealand sharemarket, Australian sharemarket, emerging markets, local and global bonds, as well as New Zealand cash deposits.
  • But, as the funds launched in August 2018, there is no performance data available, therefore evaluating a potential investment is more difficult. 
Do you have an experience with JUNO KiwiSaver you would like to share with our readers? Email our research team who would be delighted to hear from you.