Sharesies KiwiSaver set to break even as funds soar

The scheme’s net loss widened to a $1.1 million net loss in the year ended March 31 from the previous year’s $964,000 loss, although funds under management (FUM) rose from $150 million to $313 million in the latest year and has now risen to about $450 million.

The year just gone is the scheme’s second full year.

Fee income has nearly quadrupled with managed funds referral revenue rising to $2.1 million from $531,000 and transaction fees rising to $176,000 from $83,000, while operating expenses have risen at a slower pace, up to $3.5 million from $1.6 million.

Sharesies tipped in another $1.5 million of equity during the latest year but losses reduced equity at March 31 to $205,000.

Macpherson said the number of members was 11,000 at March 31 and has since risen to 14,500 and that he expects it requires about 15,000 to reach break-even point.

The scheme allows members to do some stock and fund picking and Macpherson says there are about 92 different NZX-listed options and 55 US listed options – the latter was launched on June 25. The company is working on adding some ASX-listed options.

About 45% of members have made at least one stock pick and about 11% of contributions are going into such individual picks.

Members can also choose between a range of exchange-traded funds.

“We’re trying to present as many options as we can,” he says.

“We’re talking to as many people as we can about why they like [the KiwiSaver scheme] and they like having the option for control and it’s easier to track their investments in one place.”

The company has put a lot of work into its app to give people confidence – “people tell us sometimes that they’re not happy with their old schemes and the information they received.”

About 10% of people signing up to the Sharesies KiwiSaver scheme are new to KiwiSaver but most new members are transfers from other schemes.

Sharesies has more than 700,000 investors on its platform.

Macpherson says that in May the Inland Revenue Department data showed Sharesies was getting between 7% and 8% of transfers.

The introduction of the US’ S&P 500 Index option led to a surge of sign-ups, he says, which is not surprising because it is the most popular ETF in the world and the fees are just nine basis points.

Macpherson notes that Sharesies experienced the same massive sell-off in April after US President Donald Trump announced his first version of tariffs on “liberation day” and it has taken until now to return to previous levels.