Your Booster KiwiSaver Scheme achieved returns in line with overall market performance except for the Australian shares sector which outperformed. 

The dominant factor in the success of investment markets in 2024 was the spectacular growth of large ‘growth’ companies, in particular, those referred to as the “Magnificent Seven”: Nvidia, Meta, Alphabet, Microsoft, Amazon, Apple, & Tesla. This did not help the Booster strategies which emphasises: 

1. Small companies over large companies 
2. ‘Value’ companies (cheap compared to their assets) over ‘growth’ companies (expensive compared to their assets) 
3. Profitable companies 

The only sector that profited from the emphasis on small value companies in your KiwiSaver portfolio was the Australian investment sector, while all sectors did well from the emphasis on profitable companies. 

The current danger in the market is that the large ‘growth’ companies mentioned above develop into a bubble which could easily burst, while the Booster strategy has some protection from that quarter with the tilt to small and ‘value’ companies. 

If the US share market rally becomes more broadly based, focused on a wider range of companies other than the ‘Magnificent Seven’, your Booster fund should do well as they are not so vulnerable to the technology bubble that has developed. 

In that sense, we are happy with how your KiwiSaver funds are positioned. 

Proposed changes to the phwealth KiwiSaver recommendation 

This year we will be contacting you with a review of your KiwiSaver provider. It is important that you get the very best developments from the KiwiSaver world as they occur, and the KiwiSaver market has developed significantly over the past few years. 

Getting your KiwiSaver tax rate correct 

If your tax rate has changed over the past year due to reducing or increasing personal income, then it is important to update the tax rate held by your KiwiSaver manager. You will be able to see your current KiwiSaver tax rate at the top right hand corner of your KiwiSaver screen, known as your PIR (or Prescribed Investor Rate). Call us, or tell Booster online, if you think this needs changing. It would be a pity if you were paying the wrong tax rate, as it adds up over time. 

We will be in touch and in the meantime, don’t hesitate to get in touch. 

Keep asking great questions …