Milford Asset Management has won Consumer NZ’s People’s Choice Award for KiwiSaver in 2018 and 2019.
Right now a main focus is to actively manage its KiwiSaver members' savings through COVID-19.
Newshub spoke to Milford portfolio manager Mark Riggall. He shares his advice and tips on the current situation, and discusses what the future outlook could be.
1. What should Kiwis do with their KiwiSaver?
"For many Kiwis their KiwiSaver is a meaningful sum of money. Given the unprecedented situation, people are rightly concerned. However, it is a long term savings plan and should be treated as such.
"People may see their KiwiSaver amount is considerably lower than a couple of months ago. But you can’t access this money until you’re 65, which for most of us is a long time away. So, if you stay the course now the impact at age 65 from this virus shouldn’t be too detrimental."
Asked what he’d say to people who don’t want to look at their KiwiSaver right now Riggall admits he doesn’t actually look at his KiwiSaver balance any more frequently than once a year anyway.
"I know right now it feels very real and volatile, but you can definitely get through to the other side. And you can’t get overly concerned with something out of your control."
2. New opportunities arise
Riggall points out it’s really important to maximise opportunities at a time like this. While they remain cautious overall, there are some rare, select opportunities starting to present themselves, and Milford looks to take advantage of these for its members.
"Investors like us look at company outlooks. We look at a company and consider - are there good growth prospects?"
"For some industries there’s a negative impact like Air NZ, airports, the tourism and travel sector are unfortunately significantly impacted," he says. "For other companies their long term outlook doesn’t really change. They may be affected in the short term, but industries like retail can come back to normality.
"For example, people will still need outdoor clothing so a company like Kathmandu purchased at an attractive price, could represent a good opportunity. Some industries may be blindsided now but are in a good position to weather this storm and get back to where they were prior to this outbreak.
"Then there are companies who are beneficiaries of a situation like this. Fisher and Paykel Healthcare products will be in demand as they can help alleviate respiratory disease, and are very much in demand for the immediate future. And in the long term their prospects are potentially improved too," Riggall says.
"Also behavioural changes are happening while we’re in isolation in lockdown. Looking at entertainment, video games are more popular than ever. People are using their downtime to play video games, and gaming companies can benefit accordingly."
3. Preparing and planning for a pandemic
Being defensive early was beneficial. "Milford tried where possible, to anticipate what would happen and has been watching and waiting. And the virus was evident from the beginning of this year," Riggall says.
"At the beginning of February many developed countries share markets were trading at all-time highs, and the risk was building. We took steps at the beginning of March to reduce our exposure to shares as markets fell, and we sold out of travel exposed companies."
4. Monitoring the course of the virus with a health and economic outlook
According to Riggall early on they developed a framework to help navigate them. "We did our own analysis on how the virus was spreading around the world. We listened to health experts – doctors and epidemiologists to understand their view. Based on this work we made a plan.
"The reduction of social activity means the economy is constrained. And we have a huge economic hole we can’t yet quantify. The impacts may last longer than we expect - perhaps 12 - 18 months. Companies lost revenue and governments put in measures to stop financial hardship, which plugs the hole. Steps were taken to make sure markets can still function.
"We make evaluations based on all these learnings, using our expert team to analyse all elements to determine the best course of investment action. The final part of the framework is to look at what others are doing," Riggall says.
This framework has guided the Milford team well so far during the COVID-19 outbreak.
5. Award recognition
In terms of winning the Consumer NZ’s People’s Choice Award for KiwiSaver in 2018 and 2019, Riggall says they’re proud of this achievement as it’s their clients who rated them highly for satisfaction. "We partner with our clients, investing in the same funds they do. During the last few months, that partnership has been demonstrated as we increased our usual level of communications, reassuring and informing our clients what we were doing with their investments."
Currently Milford is the broadcast sponsor for Rebuilding Paradise with Paul Henry Monday to Thursday on TV3 at 9.30pm.
It’s fair to say rebuilding Kiwis future is something the Milford team is committed too.
This article is created for Milford Asset Management