The table below summarises the fees you can expect to pay.
|Fund||Fixed||Estimated||Total estimated annual fund charges*
% net asset value
|Management fees||Costs and expenses||Performance-based fees1|
|Balanced Strategy (45% Conservative Fund, 55% Growth Fund)||0.91%||0.08%||Range 0%
|Growth Fund||0.95%||0.08%||Range 0%
|*Other charges: In addition to the annual fund charges above you will also be charged an annual account fee of $18.00*|
*The annual account fee reduced from $23.40 to $18.00 on 1 September 2021.
1The annual fund charges for the Growth Fund and Balanced Strategy include a performance-based fee estimate of 0% based on the long term average performance of the market indices used to measure the performance of the Growth Fund compared against the long term performance of the hurdle rate (see the product disclosure statement for a description of the hurdle rate). The performance-based fee is capped at 2% of the average net asset value of the Growth Fund per year (and therefore 1.10% in the Balanced Strategy).
Growth Fund performance fee
We believe performance fees are a good way of aligning our interests with yours to achieve great investment returns and grow your retirement savings.
Here’s how the Growth Fund performance fee works:
|Hurdle rate of return||The return* that must be achieved before a performance fee begins to apply.||The average Official Cash Rate (OCR) + 5% (at August 2019 = 6.00%).|
|Fee on return above the hurdle rate||The amount of the return above the hurdle rate of return that is paid to Fisher Funds.||10% (members receive 90%).|
|Performance fee cap||The maximum performance fee that can be paid to Fisher Funds in any year.||2% p.a. of Average Net Asset Value of Growth Fund.|
|High Water Mark||Where the portfolio value goes up and then down over multiple periods, this ensures that no performance fee is payable if the Manager has previously been rewarded for that performance.||No reset allowed. Where the 2% cap limits the performance fee, the High Water Mark will be set at the performance level at which the cap was triggered. This means the Manager will not be rewarded for the same performance twice.|
|Fee frequency||How often the fee is paid.||Annually.|
For full details of the performance fee formula, see the Scheme's Governing Document.
* "Return" means the increase in the unit price of the Growth Fund, which is before deducting the Administration Fee and any PIE tax that may be payable by individual members.
What does this look like in practice?
Subject to beating the hurdle rate of return and the unit price being above the High Water Mark, we are entitled to earn a performance fee of 10% of excess returns. This means that at an OCR of 1.00% (as it was in August 2019) we would receive no performance fee on the first 6.00% of your return (after all other fees). But for any return achieved in excess of 6.00%, members would receive 90% and Fisher Funds would receive 10%. The table below shows how the returns achieved by Fisher Funds would be shared assuming a 6.00% benchmark:
|Investment Return||Member share||Fisher Funds share|
As a reminder the High Water Mark also remains in place to ensure we are not rewarded for the same performance twice.
Information about the methodology for calculating dollar cost of fees on annual KiwiSaver scheme client statements
As the provider of the Fisher Funds KiwiSaver Scheme, our annual member statements must show the fees members have paid, as a dollar amount, and describe the method used to calculate them on our website.
We allocate fees and expenses (charged at the fund level for the relevant accounting period) to our members using the daily cents per unit (CPU) methodology.
The CPU methodology attributes fees and expenses, including those from underlying internal and external funds and any accrued performance fee (as is the case in the Growth Fund), to members at every fund valuation period (usually on a daily basis) using the member’s actual balance at the time the fund is valued.
Where an underlying external fund does not provide a daily CPU fee calculation, we estimate this amount based on their disclosed fees and apply this to the relevant fund.