Local bias sparks warning

KiwiSaver funds have a strong local investment slant.

According to the Reserve Bank, there is $10.6 billion of KiwiSaver funds invested in New Zealand assets, compared to $11.7 billion in offshore assets – a strong bias to New Zealand assets considering New Zealand represents just 0.1% of global sharemarkets by capitalisation.

Default funds with high cash and NZ bond balances affect the overall allocations.

Morningstar estimated that 27.4% of KiwiSaver allocations are to international shares while 13.2% is to New Zealand and Australian shares.