What’s inside Money King NZ’s investment portfolio (2023)?

Curious to see how other people invest? In this article we unveil the current Money King NZ investment portfolio, giving our readers the chance to have a nosy at the assets we hold and a glimpse into how we manage our money.

The below is for entertainment purposes only, and is not a recommendation to invest in any of the following products. What works in our portfolio may not be suitable for your personal financial situation. Please do your own research or use a professional adviser before making any investment decisions.

1. Portfolio goals and strategy

The reason we invest is to grow our wealth over the long-term, so that we can have more options in the future. By that we mean having the choice of retiring before the age of 65, the ability to switch to part-time work, or having the freedom to switch to a lower paying but more fulfilling job (for more context in case you need it, we’re in our early 30s and have a net worth in the mid six-figures. But everyone’s life journey is different, so don’t get caught up in comparing yourself against us).

Saving isn’t enough to get us to our goal. Over the long-term the interest we could earn from saving probably won’t do a good job with keeping up to inflation. Nor will putting all of our money into a house get us there (sure it would provide us with a place to live and an asset that’ll hopefully grow, but having all of our wealth tied into a house won’t pay for our groceries and other everyday living expenses). That’s why we’ve chosen to invest in assets like shares to help us get out of the rat race.

In terms of our broad investing strategy, we take somewhat of a core-satellite approach to building a portfolio which involves:

  • Core investments, which make up the vast majority of our portfolio. Core investments tend to be quite boring and relatively “safe”.
  • Satellite investments, which make up a relatively small part of our net worth. These are typically more interesting, but higher risk investments. Satellite investments allow us to spice up our otherwise boring portfolio without adding too much risk (given most of our money is still concentrated towards the core).

Further reading:
6 ways to build a long-term investment portfolio in New Zealand

2. Core investments

So first let’s look at our core investment holdings…

Index funds

Role in portfolio

Index funds are the mainstay of our portfolio, which we invest in for long-term growth. They make up roughly 50% of our net worth, and this amount will likely grow as almost all of our fresh investment contributions are going into these funds. All of our index funds are NZ domiciled, investing almost 100% into NZ and overseas shares, and come with these key benefits:

  • They save us from picking individual companies to invest in (which we don’t have time to do).
  • They have reasonable fees (which means more money invested and earning a return for us).
  • They allow us to diversify our investments internationally without having to pay paying FX and brokerage fees and the admin surrounding FIF tax.
  • They invest almost 100% into shares, providing us with good prospects for high returns over the long-term. The funds may be volatile over the short-term, but we have the timeframe and risk tolerance to ride it out.

Key holdings

We’re using Kernel for our index fund investments. Mrs Money King NZ takes an incredibly simple approach for her index fund investments, holding just one fund:

This single fund invests ~60% into global shares, ~30% into NZ shares, and ~10% infrastructure and property – allowing us to build a diversified, long-term investment portfolio without the complications of picking multiple funds. And when combined with Kernel’s auto-invest functionality, we never even have to log in to the platform to make an investment order – enabling us to grow our wealth with almost no effort!

Further reading:
4 steps to create an incredibly simple long-term investment portfolio

Mr Money King NZ has a more bespoke approach to building a portfolio, with a custom mix of Kernel’s index funds. Here’s his funds and target allocations:

They key difference between this portfolio and Kernel’s High Growth Fund is that it has a slightly less exposure to NZ shares, replaced with more exposure towards international shares (through small allocations towards the Dividend Aristocrats and thematic funds). We chose to reduce our NZ share exposure here because we already have plenty of exposure to other domestic investments, so wanted to reduce the overlap.

Further reading:
Kernel review – High quality index funds

We used to use InvestNow to invest in Smartshares ETFs, but switched over to Kernel just over a year ago after their product offering started to mature into offering a wider range of funds. We chose Kernel due to the slightly lower overall fees, not having a cash drag issue, and having better tax efficiency compared with Smartshares’ ETFs. They get bonus points for having a better UI compared with InvestNow, and better transparency around their funds and underlying holdings.

Exit strategy

Index funds will exist in our portfolio for a long time, as we don’t intend to sell them for 20-30 years (e.g. when we choose to retire). When we get closer to that point, we’ll look at an appropriate strategy for drawing down from those funds, depending on our needs at that time.

20-30 years is a long time though, so there’s no guarantee we’ll be in the exact same index funds forever. We’ll review our funds from time to time as new products come out and as our circumstances and preferences change, but we anticipate that our asset mix will largely remain the same over the long-term.

Alternative products
If we weren’t with Kernel, we’d likely be back investing through InvestNow. Even though we left them a while ago, they’re still an excellent platform and a very close alternative to Kernel. They don’t charge any transaction or account fees, and have a wide range of funds on their platform including InvestNow Foundation Series and Smartshares.

Further reading:
InvestNow review – The most efficient way to invest?
What’s the best global shares index fund in 2022?
What’s the best NZ shares index fund in 2022?

Individual shares

Role in portfolio

We’ve been investing into individual shares for several years now, again for long-term growth. Although we no longer contribute to these investments on a regular basis (because we prefer funds), we still hold several NZX-listed companies which make up just over 15% of our net worth. They aren’t necessary to have in our portfolio because our funds are already diversified enough and provide exposure to the same companies. But our shares provide greater exposure to companies we like, and provide a bit more home bias which we like due to the better tax efficiency associated with investing in NZX companies.

Key holdings

Our largest holdings are in:

  • Infratil (IFT) – Infrastructure investment company with holdings in CDC, Vodafone NZ, Wellington Airport, Pacific Radiology, and Manawa Energy.
  • EBOS (EBO) – Healthcare company, distributing medical products, selling pharmaceuticals, pet food, and consumer goods.
  • Spark (SPK) – Telecommunications company, primarily providing broadband and mobile services.
  • Investore (IPL) – Real Estate Investment Trust (REIT) holding supermarkets and large format retail stores.
  • Vital Healthcare Property (VHP) – REIT holding hospitals, medical centres, and healthcare related property.
  • Summerset (SUM) – Healthcare company, developing and operating retirement villages around NZ and Victoria, Australia.
  • Heartland (HGH) – Bank/Finance company, with a large focus on niche products such as reverse mortgages.
  • Contact Energy (CEN) – Utilities company, generating power, and selling electricity and broadband to consumers.

Exit strategy

There are some issues that have recently arisen with our shareholdings as our investments in index funds grow. Some of our shares are starting to overlap substantially with our index fund holdings – For example, we hold ~$7,000 of Contact Energy shares, but at the same time we also have ~$6,000 worth of exposure to the same company through our index funds. While Contact Energy is a good company, we don’t like it enough to justify having our investment almost doubled up!

So we’ll have to trim down some of our duplicate holdings in the near future and reinvest the proceeds into our index funds (at which point our individual shareholdings may shrink to the point we’ll no longer consider them to be core investments). But for some of our other companies, we have no plans to sell them. It’s intended that we hold onto them long-term to enjoy their growing share prices and dividends.

Further reading:
Shares 101 – How to buy shares, which companies to pick, and more

3. Satellite investments

Next, let’s have a look at the smaller satellite investments that we hold.


Role in portfolio

We personally have a preference for non-KiwiSaver investments because they don’t have restrictions around when you can withdraw from them. However, we’re still active members of KiwiSaver to take advantage of the employer and government contributions, with our KiwiSaver funds making up just under 10% of our net worth. Currently our funds are intended for two different purposes:

  • Mr Money King NZ – We have purchased a new build house due to settle in the next few months. Therefore Mr Money King NZ’s KiwiSaver will be withdrawn to make up a large portion of our deposit on our first home.
  • Mrs Money King NZ – Being a relatively new member of KiwiSaver, Mrs Money King NZ isn’t eligible to make a first home withdrawal. Therefore it’ll be kept until age 65.

Key holdings

We’re in different KiwiSaver funds due to having different goals for our KiwiSaver money. Mrs Money King NZ invests in the Kernel High Growth Fund (same as her non-KiwiSaver index funds). With the fund investing 98% into shares we think it’s a suitable investment for a timeframe of over 30 years.

Mr Money King NZ is in the Kernel Cash Plus Fund, which invests into bank deposits and cash equivalents. Cash funds don’t have high returns, but are very stable and should help protect our house deposit from any market volatility until we withdraw it in the coming months.

Exit strategy

With settlement on our first home coming up soon, Mr Money King NZ’s KiwiSaver funds will be almost completely drained to be put towards the house. With the next opportunity for us to touch his fund being at age 65, the first home withdrawal will be followed by a switch from the Cash Plus Fund to Kernel’s High Growth Fund.

We aren’t relying on our KiwiSaver money for retirement though, given our focus is on investing in non-KiwiSaver funds which have much more flexibility in when we can withdraw the money. Instead we see our KiwiSaver money as a bonus which we can access later in our lives.

Alternative products
If we weren’t using Kernel we would consider:
InvestNow KiwiSaver, which allows you to build your own KiwiSaver portfolio from over 30 funds across 12 fund managers.
Milford, a popular active fund manager with a solid track record. Even though our preference is to invest in low fee passively managed funds, KiwiSaver is such a small part of our portfolio that we wouldn’t mind having it with a good active manager.

Further reading:
KiwiSaver 101 – How does KiwiSaver fit into your investment portfolio?
What’s the best low cost Growth/Aggressive KiwiSaver fund?

Peer to Peer Lending

Role in portfolio

P2P lending is an asset class we’re no longer actively investing in, but still makes up just under 10% of our portfolio. We had considered it to be a medium-term investment – one that delivered better returns than the bank, but was less volatile than shares. We intended for the money to be put towards our house, with any leftover funds reinvested back into P2P loans or maybe into shares/index funds.

But now we’re starting to exit our P2P investments, because they’re no longer right for us:

  • We’ve already used some of our P2P money to fund our house purchase, so now want to use the leftover money to invest into shares/index funds as we consider them to be the better long-term investment.
  • Interest rates have risen quickly over the past year, while P2P returns haven’t kept up at the same pace. So we’d be getting a better effective return by paying down our mortgage, compared with staying in P2P loans.

Key holdings

Our P2P Lending is done through the Squirrel platform, where we’ve invested into two types of loans:

  • Squirrel Personal Loans – These delivers a gross return of 6% – 7.5% p.a.
  • Squirrel Construction Loans – These loans pay a variable interest rate, currently sitting at 7% p.a.

We chose to use Squirrel as they were more of a set and forget platform, whereas other P2P platforms tended to be quite hands on. Safety is another concern for P2P loans, especially with the uncertain economic environment we’re in. Squirrel works a bit differently from other P2P platforms in that you won’t necessarily lose all your money if a borrower defaults – Instead they use a reserve fund model which can compensate your losses in the case a loan goes bad.

Further reading:
Peer to Peer Lending review – Squirrel

Exit strategy

Given P2P loans aren’t really aligned with our financial goals at this point in time, we’re slowly exiting our investments in Squirrel. To do this we’re simply just waiting for borrowers to repay their principal and interest to us, then we leave the money sitting as cash on the Squirrel platform where it currently earns interest at 3.50%. This money will be gradually withdrawn to invest into index funds.

We also have the option of using Squirrel’s secondary market to sell out of our loans early. But we’re happy to have our money staying invested into loans as we’re in no rush to deploy money into our index funds (we prefer a slow and steady approach of drip feeding money into index funds, rather than dumping big lump sums of money into them at once).

Equity Crowdfunding

Role in portfolio

Investments into equity crowdfunding represent less than 5% of our net worth. These are investments into shares of companies that aren’t listed on any sharemarket. They’re typically higher risk but potentially higher growth investments and tend to be illiquid (as there’s no market you can sell these shares on), so we just hold them for long-term growth. We no longer make any new investments into crowdfunding offers and don’t intend to anymore (unless something really compelling comes up), because these investments can be slightly speculative and we don’t have much spare cash these days.

Key holdings

We’ve invested in a few Equity Crowdfunding offers through the likes of Snowball Effect and Equitise. Some are decently sized, more serious holdings in our portfolio:

  • Punakaiki Fund – A fund primarily investing in high growth NZ technology related companies. They plan to list on the NZX soon.
  • Squirrel – A mortgage broker and Peer to Peer Lending platform.

Some investments are more on the just for fun/speculative side, representing just a very tiny proportion of our net worth:

  • Zeffer Cider – A cider brewer.
  • Behemoth Brewing – A beer brewer.
  • Aisleworx – Creates digital shopping trollies and sells advertising on them. This is our best performing investment to date, having bought into the investment at $7.37 and having increased to an estimated value of $85+ (too bad we only invested a few hundred dollars into this one). Though we put this success down to luck, rather than skill in picking companies.

There’s a few other companies we’ve dabbled in, but these each have just a few hundred dollars invested in them.

Exit strategy

Because these companies aren’t listed on any market, we have no choice but to hold these investments until a liquidity event on one of the companies occurs (such as a listing on the sharemarket or acquisition by another company). So we’re just enjoying the ride as long-term shareholders, hoping our companies grow and that none of our investments goes bust.

Further Reading:
4 things to know about investing in Equity Crowdfunding


Role in portfolio

Bonds are an investment that’s leftover from our earlier days of investing, making up less than 5% of our net worth. We no longer contribute to these investments – Shares are much more suitable for our long-term investment timeframe and high risk tolerance.

Key holdings

We hold just a small handful of individual bond issues listed on the NZ bond market.

Exit strategy

Bonds no longer fit in with our investment portfolio, and we do have the option of selling them through an NZX broker. But that’ll incur hefty brokerage fees, and we don’t have an urgent need for the money. So at this stage we’re just patiently waiting for our bonds to mature over the next few years, at which point they’ll likely be spent or reinvested elsewhere.

Further Reading:
Bonds 101 – 5 things to know about investing in bonds


Role in portfolio

Crypto is just a fun and speculative holding, making up less than 5% of our net worth. It’s a small enough investment that it won’t hurt us financially if it goes to zero, but still provides us with some skin in the game if crypto does go to the moon someday – kind of like a lottery ticket that never expires.

Key holdings

We keep our crypto holdings simple, investing only in the two largest cryptocurrencies, Bitcoin and Ethereum. While these coins are already risky assets to hold, they’re still relatively stable compared to smaller cryptocurrencies. We also use crypto to get exposure to gold through the Pax Gold token – it’s a bit like an alternative to investing through gold via an ETF. Again it’s just a very small, non-serious, just for fun “investment”.

We also keep the custody arrangements of our crypto relatively simple, holding our coins through a Ledger hardware wallet. We could put our coins on some sort of platform to earn interest from them, but feel that the risk of doing so outweighs the potential returns from such a small holding – especially when so many platforms are going bust or getting hacked these days. Instead we just use Easy Crypto to buy our coins who sends them straight to our wallet.

Exit strategy

Being fun investments, we have no concrete plans as to when to sell them. We’re just holding them and seeing what happens without any real expectation for how they’ll perform. It’s a bit like supporting the All Blacks rugby team these days – you can’t expect too much from them, or else you’ll be left disappointed.

Further Reading:
Cryptocurrency 101 – Is it investing or gambling?
Gold and Silver – Is it investing or gambling?

4. Other products

Lastly, these are some other products we hold that aren’t exactly investments, but are important tools in supporting the management of our finances.

Savings/Emergency Fund

Role in portfolio

About 5% of our net worth is in cash/savings accounts. This money is used for three key reasons:

  • Upcoming short-term expenses. Money we’ve put aside for a coffee table or holiday in a few months’ time needs to be protected from the volatility of the sharemarket, not exposed to it.
  • Emergency fund. We’re big fans of having emergency money put aside in a safe and accessible place, to pay for any unexpected or nasty expenses that may come up.
  • Cash waiting to be allocated to other investments. Not to time the market, but it’s so we can dollar cost average into our funds (to smooth out any market volatility) rather than putting in large lump sums at once. So we keep this cash in a savings account to earn some interest in the meantime.

Key holdings

  • Heartland Direct Call Account – This is our multi-purpose account used to store money for short-term expenses, cash waiting to be allocated to investments, as well as emergency fund money. The money in this account can be accessed within 1 business day and currently earns interest at 3%.
  • Kernel Cash Plus Fund – A place to store additional emergency funds. It’s slightly less accessible than an on-call savings account (as it could take a few days to sell the units and have the money withdrawn to our bank account), but should deliver a slightly higher return than an on-call savings account.

Exit strategy

Our Heartland Direct Call Account gets quite a lot of use. It gets topped up immediately after every payday, then gradually gets withdrawn from as the month goes by to top up our transaction accounts, pay for upcoming expenses, and to drip feed money into our investments. Though we try to keep at least a few thousand dollars in the account at all times to have the ability to cover any emergency expenses.

However, we have a couple of issues with this account that may result in us switching to another product. Firstly, the account isn’t a PIE. That means our interest is getting taxed at 33% whereas it could be taxed at 28% under a PIE account. Secondly, Heartland’s interest rates have fallen behind competing options (e.g. Kiwibank’s Online Call Account which currently pays 3.35%, or Squirrel’s on-call product which currently pays 3.50%). We’ll keep an eye on rates and may look to switch to another on-call account if Heartland’s offering doesn’t improve. Other savings products (like notice savers, bonus savers, and term deposits) are out of the question given the restrictions they have around withdrawing the money.

As for our Kernel Cash Plus Fund, it’s money we hopefully never have to use. Instead its role is to sit in the background, provide us with some comfort and security, and earn a little bit of interest in the process. There’s a number of other cash funds out there (from fund managers like Smartshares, Milford, and Macquarie), but using Kernel’s fund is easy as it saves us from having to sign up with another platform to invest in it.

Further reading:
Emergency funds – Where should you keep your rainy day money?
The ultimate guide to bank and savings accounts in New Zealand

Transaction accounts/credit cards

Role in portfolio

We can’t use our index funds to pay for stuff at the supermarket! That’s why we keep a minimal amount of money in transaction accounts for immediate spending. These are tied to EFTPOS and debit cards so that we can easily pay for food, housing, bills, and other shopping.

We also have a couple of credit cards to help us pay for things. They often get a bad rap, but we always pay these cards off in full before any interest charges kicks in. We just use them to collect rewards points, and to take advantage of their interest free periods so that our money can stay in our savings accounts and earn interest for longer.

Key holdings

  • ANZ Accounts (x3) – We have three ordinary transaction accounts with ANZ. There’s no particular reason we chose this bank – all major banks in NZ are pretty similar in terms of features and services.
    • 1x household account: For household expenses like food, housing, and homeware.
    • 2x personal accounts: For personal expenses like clothes and electronics.
  • American Express Airpoints Card – We use this credit card for everyday spending (at the supermarket and other major retailers), and earn 1 Airpoints Dollar for every $100 spent through the card. The Airpoints can then be redeemed for flights or for things on the Airpoints Store.
  • ASB Visa Lite Card – We occasionally use this card for large purchases. That’s because the card gives us a 6 month interest free period for purchases of $1,000 and over. So instead of paying cash for an item, we can keep that money in our savings account to earn interest. While that interest won’t make us rich, it can also help to spread out a purchase of a big item over several months.


Role in portfolio

We have recently bought a modest house that’ll settle in the next couple of months, but we don’t consider this an investment. It’ll appreciate in value over time and save us from paying rent, but it’ll also cost us tons of money in mortgage interest, rates, insurance, and so on. So we consider it to be a lifestyle asset – something we use for enjoyment or to live our lives, rather than an asset used to make money. Therefore we choose to exclude the house from our net worth and investment portfolio. That’s probably kind of weird, but that’s just our personal view of our finances.

Buying a house brings up a big change to our financial situation in that we’ll now have a mortgage, and that gives us a few things to consider. Firstly, will we use any spare cash to pay the mortgage down quicker or invest? We’re fans of doing both. Even though paying down the mortgage is a guaranteed tax-free return, it’ll still be full steam ahead with building our investment portfolio. That’s because we’d rather not concentrate our wealth on a single asset based in a single location.

Secondly, we also need to think more carefully about where to invest. We’re essentially leveraging to invest, borrowing money from the bank (in the form of our home loan) to invest into other things. Therefore it’s undesirable to invest in assets that would deliver a net return less than our mortgage interest rate. That’s one reason for our focus on index funds, as we see them as having the best chance of outperforming mortgage interest rates over the long-term.

Further Reading:
Buying a house – an overrated way to build wealth?


In summary our portfolio is made up of the following:

Core investments

  • Index funds (~50% of net worth) – Our main investments to grow our wealth over the long-term. We invest through Kernel, with the majority of the portfolio invested into international share index funds.
  • Individual shares (~15% of net worth) – Investments into NZX listed companies to get more exposure to companies we like. However, we’ll be reducing our holdings as they increasingly overlap with our index funds.

Satellite investments

  • KiwiSaver (~10% of net worth) – Split between a Cash (for first home purchase) and Aggressive fund (for withdrawal at age 65).
  • Peer to Peer Lending (~10% of net worth) – An investment we’re exiting due to no longer fitting with our financial goals.
  • Equity Crowdfunding (<5% of net worth) – Investments into unlisted companies. Some fun and speculative, some relatively serious long-term holds.
  • Bonds (<5% of net worth) – Another investment we’re exiting due to no longer fitting with our financial goals.
  • Cryptocurrency (<5% of net worth) – Just taking a punt into Bitcoin, Ethereum, and gold with a very small amount of money.

Other products

  • Savings/Emergency fund (~5% of net worth) – Money set aside in a savings account/cash fund to pay for short-term expenses, as an emergency fund, and to hold cash waiting to be invested.
  • Transactional accounts (<5% of net worth) – For everyday spending.
  • House – Excluded from our portfolio due to being viewed as a lifestyle asset.

So what’s next for us? We have a few things to tidy up over 2023 and beyond such as overlapping individual shares to sell off, phasing out P2P loans and bonds, and switching to an aggressive KiwiSaver once our house settles. But otherwise we plan to continue with the same strategy of focusing on relatively boring index funds (and to some extent individual shares), with a few satellite investments on the side.

We’ll still review our finances every few months to see if we can do anything better and to make sure our investment strategy still aligns with our goals, but it’s unlikely that we’ll make any drastic tweaks. Any changes we may make will be carefully considered rather than knee-jerk moves from one investment to another, so don’t expect any exciting portfolio updates from us anytime soon. It’s often said that good investing should be boring, and we think our portfolio and investment strategy is a good reflection of that!

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The content of this article is based on Money King NZ’s opinion and should not be considered financial advice. The information should never be used without first assessing your own personal and financial situation, and conducting your own research. You may wish to consult with an authorised financial adviser before making any investment decisions.


  1. Awesome article and a great way to be thinking about investing. This is how every retail investor should be thinking.

  2. No one size fits all. I’ve once convinced that the kernel high growth was the one to invest in after reading the internal research paper for their methodology of how, why they constructed the fund, the theories, and the evaluation behind it, but I still can’t believe any of them can outperform SP500, period. Simplicity is the key, diversification is for ignorance.

    1. Totally agree that diversification is for the ignorant. But we are one of the ignorant – we have no idea which asset class/country/industry/company is going to perform best into the future. Hence our selection of highly diversified funds – we’d never invest in an S&P 500 fund as there’s no guarantee that US shares will always outperform non-US shares.

  3. Would you consider a total world fund to a better/safer investment than something like the S&P500?

    1. We don’t really like to use the words better or safer when comparing these two funds, but what we would say is that a global fund better aligns with our investment preferences. Our personal thinking is that we don’t have a compelling reason to invest only in US listed shares, ignoring any companies listed in other countries in the process – there is no guarantee that US listed shares will perform the best. Hence our investment into global funds.

      Others may beg to differ. They may be ok with only investing in US listed shares or actively seek a US centric portfolio, therefore select the S&P 500. That’s fine too – both are broadly diversified funds and it all comes down to what you want out of your portfolio.

      1. Thanks Money King, your site has been an amazing help for a beginner investor like me. It reaffirms my belief that it’s much safer to invest globally than concentrate on US.

  4. Thanks for sharing team (Mr. and Mrs. MK)

    Really interesting to see other peoples approach. I am interested in your approach to generally avoid bonds (beyond a few odds and ends). Honestly it makes sense to me given your stage, though I do recall reading one of the reports that relooked at the trinity study, suggesting a portion of your portfolio (I think between 20 and 10%) assigned to bonds outperformed 100% shares historically. Of course past performance doesn’t indicate future. etc. etc. I must go track it down and read it again. It sounds like my whanau are overall in a very similar age and stage to yours, and I feel like having more in shares is likely preferable.

    I really appreciate you sharing this article, and your website continues to produce good thought provoking articles that I find very beneficial.


    P.S. hope you and yours are doing well and avoiding too much of this horrible weather

    1. Regarding the bonds point above, I was just re-reading your allocation, and I wonder if perhaps you consider the infrastructure fund, and the dividend fund may possibly fill a similar role?

    2. Thanks Mikey, we are safe and well. Hope you are too.

      Perhaps that report refers to the risk adjusted returns (rather than absolute returns) being higher for a portfolio containing 10-20% bonds? In our case we’re happy to take on the extra risk given the very long time horizon, and the drag bonds would have on absolute returns.

      And yes, we do have a number of investments that could be considered bond substitutes in a way. These include the infrastructure and dividend funds you mention, individual shares (like SPK, CEN, IFT), and P2P loans. So we’re already somewhat conservative in some areas – having a dedicated exposure to bonds would perhaps make things a bit too conservative!

      1. Fair enough. Honestly my guess (and it is only that) is that at this level it is likely splitting hairs/crystal ball gazing/guessing as to what is THE BEST allocation, hence my personal preference to keep things super simple. I couldn’t find the exact article I was looking for but if anyone has an interest, a couple of interesting tasters to tip you down the rabbit hole:

        (look at the figure and the summarised stock allocations)

        (table 2 is particularly interesting in for people interested in FIRE)

        Essentially making the case that at standard withdrawal rates most FIRE people throw around, 100% stocks may not be the most likely to succeed (so yes risk adjusted in a way, in that downside risk is that your portfolio drops to $0 in a given timeframe in a calculated proportion of scenarios).

        Honestly I have no idea how this applies to the sort of bespoke allocation that you use MKNZ, and I would suggest the difference in the success rate is so close that they are likely well within the simulation confidence intervals (which no one ever seems to report) so, as I say, probably splitting hairs.

        None the less, what a fascinating subject!


      2. That’s interesting. We would say those studies apply to a portfolio being drawn down from in retirement though? Not sure if there’s any similar research done on asset allocations in the accumulation phase, but were sure there’s various arguments either way!

  5. Another great read. What about exposure to emerging markets? Is this covered by Kernel with the 60% global allocation?

    1. Hi there, we don’t have any meaningful emerging markets exposure and we’re ok with that. Some of our Kernel funds have a minuscule allocation to emerging markets (like China, India, Brazil, South Korea), but that’s not something we intentionally sought.

  6. SP500s top 100 companies all have 50% revenue generation from outside of the US, so basically you’re well diversified already. And over 80% of global 100 are US companies anyway. I do agree NZ Top 20 is very solid even sometimes outperform SP500 but we’re just too small as a nation on the tale of the dog

    1. I just disagree with this notion.
      Say you invest in an Asian top 50 company, and say 80% have markets in the US market. Would you say that this make believe asian fund is already well diversified in the US market?
      No, no you wouldn’t be diversified in the US market.

      1. Interesting point. A somewhat related fact – the FTSE 100 (representing the 100 largest companies listed on the London Stock Exchange) earns 75-80% of its revenues from outside the United Kingdom. Yet few people would consider the FTSE an adequately geographically diversified index even though it has a higher proportion of overseas revenue compared with the S&P 500.

      2. Agreed Money King NZ, that’s my point. If we flip the countries around many people would disagree with being diversified. In my hypothetical scenario there would be very few who would say that that asian fund is well diversified.

        So I don’t really agree with the notion the the S&P 500 is well diversified globally (it’s greatly diversified within U.S though, that part is true).

  7. Thanks for sharing. Always great to hear your reasoning and well researched thoughts. Why did you move from Juno Funds (I remember reading it from your older articles) for your kiwisaver to Kernel?

    1. Good question. A couple of years ago we needed to move from a Growth to Conservative fund after deciding we’d use Mr Money King NZ’s KiwiSaver money to buy our first home. Juno’s fees were pretty high relative to the potential returns of a conservative fund, so we decided to switch to a low cost option via Simplicity.

      We went for conservative over a cash fund due to uncertainty around the timeframe of our house purchase, higher potential returns, and willingness to accept the risk of the fund going down. That decision didn’t turn out great, with conservative funds having a horrible year in 2022.

      So later on with our house purchase becoming imminent, we cut out losses and moved from conservative to cash with Kernel.

      In hindsight we should have switched away from Juno a lot sooner. We chose them due to their low fees and outstanding performance, but they later increased their fees and started to underperform other funds massively. We should have also switched to a cash fund at that time. Although a conservative fund was the right fit for us at the time, perhaps we shouldn’t have been too greedy and gone for a safer option instead.

  8. Hey MoneyKing,

    Really enjoy your articles.

    Got a question?

    I got about 15K in InvestNow Global All Country… but I’m thinking of switching to Kernel Global 100 70% + NZ50 20% + Global Infrastructure 10%

    Do you reckon I should move my investnow from Global all country to Kernel? or start a new investment in Kernel. I invest about 1k per month


    1. Hi David, there’s not really a right or wrong answer here. Maybe just keep in mind that Kernel has a $5 p/m membership fee that kicks in once you’re investing $25k or more. Transferring that $15k over from InvestNow would get you to that mark faster, so there may be benefit from starting from zero on Kernel. Though you have to balance that out with the lower management fees that Kernel offer, and the convenience of having your investments on one platform. Regardless of what you do the differences are minor in the grand scheme of things – you can’t go too far wrong either way.

  9. Thanks MoneyKing for another great article- good to read through then reflect on my own allocations 🙂

    Do you have an article with any tips around how to invest in equity crowdfunding investments as a beginner?

  10. Hello Mr. Money king, I am a newbie to investing and started my career quite late at 42 years. After thoroughly reading your articles , I have below two doubts.
    1. In Kernel, I am opting for Kiwi saver high growth fund. So apart from it I want to opt for either NZ20 fund or NZ50, Which one is better and why? (in your point of view)

    2. So once my investing of 25k threshold exceeds how much I have to pay kernel fees? and that 25k criteria excludes with kiwi saver or with kiwi saver ? suppose say in kiwi saver i have 18k after 5 years and normal funds I have 25k after 2.5 years, how do they calculate? Is it worth IF I stay in kernel index funds for 20 years, becoz after 20 years I retire at 62 years.

    Please do answer me. Sorry for long text.
    Thank you

    1. Hi there,

      1. It really depends on your reasons for investing in the NZ20 or NZ50. Are you investing in them because you want to diversify away from the High Growth Fund? If so, it doesn’t make sense to invest in either as the High Growth Fund already has a fairly large allocation to NZ shares. By investing in the NZ20 or NZ50 you’d be concentrating your portfolio towards NZ rather than diversifying it. Otherwise there’s no definitive best out of the two.

      2. You can find details on Kernel’s pricing here: https://kernelwealth.co.nz/pricing. Basically all funds (KiwiSaver or not) have a management fee. In addition if you invest $25k or more outside of KiwiSaver, you pay a $5 per month membership fee. That $5 per month fee equates to an additional 0.24% on top of a $25k portfolio or 0.06% on top of a $100k portfolio. Is that worth it? That’s up to you to decide and compare how it stacks up against other options.

  11. Would you say a Kernel high growth fund would also be a good option to open for young children? Something you don’t have to think about much and just deposit small amount weekly.

    1. Going for the High Growth Fund definitely simplified things a lot compared to picking your own funds. No need to choose individual funds and decide how much to invest in each fund. It’s pretty much just set and forget.

  12. Hi – fairly new to investing and loving all your great articles. I’m wanting to put money into a diversified growth fund and after looking at a number of platforms have decided to invest with the Kernel platform. Would it make sense financially to split it 50:50 into their High Growth Fund and Balanced Fund (as they don’t have a growth fund as such to invest in directly) and paying equal amounts into each every week – or it is usually better to just go with a single diversified growth fund – and so I’m best to look elsewhere?

    1. Hi Carol, while it’s a little tidier and more convenient to invest in a single Growth fund, your solution certainly still works for creating a pseudo “Growth” fund with ~80% shares and ~20% bonds/cash. Just one thing you may want to consider is rebalancing – with your two fund portfolio, you may have to manually rebalance your portfolio once in a while to maintain the 80/20 split between shares and bonds. Otherwise there’s no major advantages and disadvantages either way.

  13. Hey, are you planning up doing an update to this article as its coming up on a year. Curious to see if things have changed for you.

    1. We’re still undecided. A few things have changed, but not sure they’re significant enough to justify writing a new article. Cheers.

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