As the Covid-19 pandemic severely impacts people’s health and ways of life around the globe, it is making an impact on investment markets too, particularly those with a higher exposure to share markets.
Anglican Financial Care’s Superannuation & Trusts Manager Bruce Dutton wrote to church-based retirement savers yesterday, to reassure them that the Christian KiwiSaver investment team is closely monitoring the impact the pandemic is having on the funds they manage.
Mr Dutton acknowledges that negative investment returns never make fun reading, and for some investors they can be frightening. But the Christian KiwiSaver team have already made some prudent choices that could ease the financial impact of this situation as it develops.
Prior to the latest market developments, the Christian KiwiSaver Investment Team determined that asset prices were too expensive, so they we took a more conservative approach by investing less in shares and bonds and holding more in cash.
Now that the investment environment has become more volatile, this proactive choice to rely on cash assets has the potential to slow the overall reduction in value of KiwiSaver investments.
“In this very volatile environment, we remain vigilant, diversified and cautious in our approach to investing your money.” said Bruce Dutton today.
Advice from the top: Stick to your KiwiSaver path, even when it gets rocky
Gillian Boyes from the New Zealand Financial Markets Authority – Te Mana Tatai Hokohoko has come out in favour of retirement savers staying put as a way to reduce the financial fallout of the coronavirus.
“It can be tough to watch your KiwiSaver balance go down. But panicking and moving to a more conservative fund during a market downturn isn’t a good idea.” she said in a recent interview.
Ms Boyes told long-term investors to remember that when a KiwiSaver balance falls in the short-term, they haven’t actually lost any money – it just means the value of investments has dropped.
“But if you change your fund that loss becomes real – your KiwiSaver provider has to sell your investments at that new low value so you end up locking in that loss.” she said.
Bruce Dutton from Anglican Financial Care looks forward to the day when COVID-19 ceases to interrupt and threaten so many people’s lives, but he is also aware that nobody knows exactly when ‘normal’ conditions will resume for anyone, including for the markets.
“We continue to be fully operational and available,” he said, “We will continue to assess…as the current health and economic situation develops.”
If Christian KiwiSaver Scheme members have any concerns they can contact info@christianKiwiSaver.nz or phone on 0508 738 473.