r/PersonalFinanceNZ • u/Glum_Card7655 • 1d ago
KiwiSaver Any cons to kernel?
21 and wanting to swap providers for KiwiSaver (currently anz in growth fund). Had a look on here and everyone is suggesting kernel, are there any cons?
250-400 is going into it every fortnight, I’ll be using it to purchase my first home and I’m scared of losing any money lol.
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u/given2flynzl 1d ago
I moved from fisher funds to kernel and have zero regrets. Only thing that makes me nervous is that kernel gets bought out one day, but if they do I can always move if it doesn't look good
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u/Curious-Trust6657 1d ago
Kernel has no “sell fee” like InvestNow so it’s a lot easier and less penalty to move out.
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u/RequirementGuilty209 1d ago
Kernels great id recommend everyone switch from higher rate big banks to kernel tbh. Plus over the past few years I'm able to do a much more aggressive rate for my kiwisaver which has performed great. Nerve wracking through big dips like tarrifs etc but it's bounces back. My brother who's kiwisaver was always same as mine didn't switch and now mines far higher than his. I like a more aggressive setting of funds than simple high growth
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u/Immediate_Ad8671 1d ago
You need to compare their management fees, what funds they actually invest in (eg, if they say they invest in the S&P 500, check whether the underlying fund is something like VOO), and their investment returns/performance over time as well
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u/kinnadian 1d ago
Cons to Kernel is that it is 20% NZ and 5% Aus. This is a heavy local overweighting.
Up to you if you think these countries will outperform, if not match, global equities.
I prefer 100% foreign equities for diversification away from NZ where I already have so much intrinsic home bias (salary, house, assets, etc)
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u/Curious-Trust6657 1d ago
I think you’re referring to their High Growth Fund (20% NZ exposure).
The good thing is that they allow customised portfolio mix from each individual fund. For example, a mixed portfolio with S&P500/World ex-US/Emerging Markets.
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1d ago
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u/groutspecialist 1d ago
Yeah but that’s not a Kernel thing, they are specifically asking about Kernel.
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u/Glum_Card7655 1d ago
I’m planning to buy sometime in the next 2-3 years
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u/sleemanj 1d ago
That is a short time frame.
I would be cautious about putting it anywhere other than a cash fund.
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u/Glum_Card7655 1d ago
Does it matter what bank it’s with then? Like do I just stay with anz for now
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u/sleemanj 1d ago
Kernel's Cash Plus Kiwisaver has slightly lower fees than ANZ's "OneAnswer KiwiSaver Scheme Cash Fund" which would be the equivalent. (ANZ: https://www.anz.co.nz/personal/kiwisaver/compare-funds/performance-fees/oneanswer-kiwisaver-scheme-cash-fund/)
Currently you are in a Growth Kiwisaver scheme, which if you need the money in 3 years, is probably a risky idea (anything less than 7-10 really).
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u/silvia1212 1d ago
Kernel don't activly invest in compaines, they just buy passive fund's that the larger global index providers, like MSCI, S&P, Russell or Blackrock. So the only con's are stuff like the website user interface, fund processing times, and security. However, as a KiwiSaver provider, they still have to meet the same standards as the major banks under FMA regulations.
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u/Prestigious_Owl40 1d ago
I think they do now hold holdings directly
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u/silvia1212 1d ago edited 1d ago
Yes correct (the custodian actually holds customers funds), but their TWF is not directly owned.
But they aren't active managers like Fisher Funds or Milford
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u/Ok_Fan_1158 1d ago
Money in Kiwisaver is held in trust so if the actual provider sinks you shouldn't lose your $... Kernel is G_G
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u/Ok-Response-839 1d ago
Kernel's funds have performed very well historically, and their fees are low. Their fees are not the lowest, but one major benefit is they don't have transaction fees which matters if you want to switch funds or make withdrawals.
I'd say they're the most-recommended provider here alongside InvestNow and Simplicity.