Kernel founder Dean Anderson said he expected to see others try to \u201cshare in Kernel\u2019s success\u201d due to its growth.<\/p>\n
\u201cCompetition is good for NZ, and good for us.\u201d<\/p>\n
Gertjan Verdickt, a former senior lecturer in finance at the University of Auckland, said there was a global awareness of fees eroding profits.<\/p>\n
\u201cGiven the large number of managers that underperform, this is one way of attracting more money: you mechanically increase performance by lowering costs and you can distinguish yourself from competitors by offering lower fees.\u201d<\/p>\n
Generate investment specialist Greg Smith said the Sharesies move was an industry trend rather than a direct shot at a competitor.<\/p>\n
\u201cBroad market exposure is increasingly becoming a commodity product, and when that happens providers tend to compete aggressively on price.<\/p>\n
\u201cThe risk is that investors focus solely on fees. Low fees are a very good thing and 0.1% is certainly competitive, but investors should remember that portfolio construction, diversification and staying invested over the long term will usually have a much bigger impact on outcomes than a few basis points of fees.<\/p>\n
\u201cInvestors don\u2019t spend fees in retirement, they spend returns. Ultimately, what matters is the return achieved after fees, and that\u2019s influenced by investment strategy and risk as much as cost.\u201d<\/p>\n
He said there was a risk that fee comparisons did not tell the whole story.<\/p>\n
\u201cA global index fund gives investors broad market exposure, but it can also result in very concentrated exposure to a handful of the largest companies.<\/p>\n
\u201cToday, a significant portion of many global index returns comes from a small group of large US technology stocks. That\u2019s not necessarily a problem, but investors should understand what they own and ensure their portfolio is appropriately diversified rather than focusing exclusively on the headline fee.<\/p>\n
\u201cFees matter, but so does diversification. Many investors can tell you the fee they\u2019re paying, but fewer can tell you how concentrated their portfolio is. The real objective isn\u2019t simply finding the cheapest fund.<\/p>\n
It\u2019s building a portfolio that delivers strong risk-adjusted returns over the long term.”<\/p>\n","protected":false},"excerpt":{"rendered":"Kernel founder Dean Anderson said he expected to see others try to \u201cshare in Kernel\u2019s success\u201d due to…\n","protected":false},"author":2,"featured_media":621041,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[7229,1975,138,813,295,305692,225,111,139,69,13909,812,1120],"class_list":["post-621040","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-aim","tag-at","tag-business","tag-edmunds","tag-fund","tag-lowfee","tag-market","tag-new-zealand","tag-newzealand","tag-nz","tag-sharesies","tag-susan","tag-takes"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/621040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=621040"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/621040\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/621041"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=621040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=621040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=621040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}