Call for simple KiwiSaver benchmarks to replace ‘Frankenstein constructs’
While the first part of Russell Investment NZ’s research, released last year, focused on institutional benchmarking practices, the second considers KiwiSaver. It concludes that most benchmarks are composed of a hodgepodge of unrecognisable underlying fund benchmarks providing little relevant information to members.
For example a survey of the ten biggest providers found 40 different indices used to represent seven asset classes, and for one Balanced Fund, a bewildering 17 separate indices including six for one asset class - Australasian equities - were used.
Report author, Russell CEO Matthew Arnold thinks the practice should stop.
Under KiwiSaver, employees rather than employers have the responsibility of choosing a retirement product and strategy, so given low levels of financial literacy, KiwiSaver needs to be simple and transparent. It would also provide an easier means for financial advisors to judge the overall results of KiwiSavers, both stock selection and asset allocation, he says.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
![[Weekly Wrap] KiwiSaver in play; but outcome unclear](https://goodreturns.publit.io/file/c_fill,w_300,h_200/0ad582e4-c9a3-4692-bbe2-62d928f77fd2.jpg)
