Top performing Aggressive KiwiSaver fund
The Booster KiwiSaver Scheme Geared Growth Fund is our preferred aggressive multi-sector KiwiSaver fund for KiwiSaver investors with a long investment horizon (15 years or more) and who are willing to accept significant volatility with their investment. Please keep in mind that this information is not intended to be financial advice. If you'd like to receive tailored KiwiSaver advice to determine whether this fund is right for you, please complete our KiwiSaver Discovery Questionnaire.
Fund: Booster Geared Growth
About: The Geared Growth Fund is designed to enable long-term savers to gain the benefits of a leveraged (or geared) exposure to growth assets (e.g. shares) through borrowing. Gearing simply means borrowing money to invest. The Geared Growth Fund increases the effective size of your invested funds by purchasing additional investments with borrowed funds. This magnifies the returns for the investor, both up and down. This is best illustrated through a hypothetical example. Using the Geared Growth Fund’s target gearing ratio of 35%, if the underlying investments were to increase by 10%, an investor in the Geared Growth Fund would receive a 13.5% return. While if the underlying investments were to fall by 10%, the balance of an investor in the Geared Growth would fall by 13.5%.
Our view: This specialist fund has a target to invest 99% of its money into growth assets (equities) while also borrowing money at a fixed interest rate to invest in shares. The idea is that borrowing at low interest rates means returns from buying and selling investments will be higher as the cost of debt is cheap. This is also designed to maximise the fund's profits because the cost of borrowing is fixed and, all going well, less than the investment returns. While the management fee is higher than other Booster funds (due to the interest costs paid on additional money sourced), its aim is to outperform market returns.
What makes the fund stand out? Due to the 99% allocation to Growth assets, leveraged exposure to these assets, and broad diversification across both listed and unlisted securities here in New Zealand and Globally, this fund is ideal for long-term KiwiSaver investors. The fund has one of the best long-term performance track records returning 10% per annum after fees but before tax over the last 10 years as at 31 March 2023. This fund was also awarded the Canstar 5-Star Rating for Outstanding Value Aggressive KiwiSaver in September 2022.
Fees: 1.75% annual management fee and an annual $36 membership fee. The base fund fee decreases as your balance increases. Please refer to page 10 of the Product Disclosure Statement for the breakdown.
Historical Returns and Past Performance as at 31 March 2023:
Investment Composition:
Cash and cash equivalents 1%
International equities 52%
Australasian equities: 33%
Listed property 8%
Unlisted property 6%
For a breakdown of the funds target holdings please refer to page two of the fund fact sheet Booster KiwiSaver Scheme Geared Growth Fund Fact Sheet as at 31 March 2023.
Investment Philosophy:
Since starting in 1998, Booster has consistently managed client portfolios with a strong awareness of downside risk management within a “core + satellite” investment philosophy.
Booster focus on building robust portfolios that will deliver reliable outcomes relative to the market. They have done this by combining the best elements of active and index-based approaches. Index-based strategies provide an effective way of spreading risk through broad diversification, and therefore make a good core allocation for portfolios. Active decision-making via targeted internal decisions and satellite active managers give Booster the ability to capture additional opportunities and manage risks.
Booster also look to enhance results by creating their own opportunities. Today’s economic environment places a huge challenge on delivering investment income and delivering long-run returns. Tackling this challenge effectively involves thinking outside the box, rather than automatically accepting more portfolio volatility. Booster’s Tahi and Private Land & Property Funds are a first step in helping support a sustainable income-based return for investors, while also reflecting their desire to create innovative ways to connect clients’ money with and support private New Zealand businesses.
Booster consider Environmental, Social and Governance risks in their investments, and provide ways for clients to reflect their individual ethical choices. Booster have successfully managed Socially Responsible Investment funds for over 10 years, and were the first KiwiSaver manager to have these funds independently certified by the Responsible Investment Association of Australasia (RIAA).
About Booster:
Booster are a New Zealand owned and operated financial services business based in Wellington who since their inception in 1998 now look after over 130,000 members’ savings with over $5B in funds under management.
Booster was founded by a handful of industry experts who felt there was a better way to help New Zealanders look after their money. To this day, Booster are still majority-owned by Senior Management within the business.
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Step 1.
Identify
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Step 2.
Recommendation
Once we have identified the best option for you we’ll send you an email with our fund recommendation and how you can take action
Step 3.
Decision
Then the choice is yours. You decide whether or not you would like to go with our recommendation or stay with your existing plan.