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Mercer KiwiSaver review: A wide range of investment options

With seven funds to choose from and free financial advice, you're likely to find a plan that works for you with Mercer.

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With of the largest and most popular KiwiSaver schemes available, Mercer has been helping Kiwis saver for their retirement for over 60 years

In this article, we take a look at Mercer’s KiwiSaver funds and their performance to help you decide if it offers the best scheme for you.

About Mercer

Mercer is a KiwiSaver scheme provider with vast experience in retirement wealth and is the preferred KiwiSaver provider for some of the country’s largest organisations.

As well as the wide range of investment opportunities to choose from, Mercer offers free financial advice to help you decide which KiwiSaver fund is the right fit for you.

What types of funds are offered by Mercer KiwiSaver?

Data indicated here is updated regularly
Name Product Past Performance - 6 Months Past Performance - 1 Year Past Performance - 2 Years Past Performance - 3 Years Past Performance - 5 Years Calculated fees on $50,000 balance
Mercer KiwiSaver - Cash
N/A
0.91%
N/A
N/A
1.77%
$212
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
Mercer KiwiSaver - Conservative
N/A
3.84%
N/A
N/A
4.51%
$317
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
Mercer KiwiSaver - Moderate
N/A
3.36%
N/A
N/A
4.88%
$392
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
Mercer KiwiSaver - Balanced
N/A
3.01%
N/A
N/A
5.81%
$452
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
Mercer KiwiSaver - Growth
N/A
2.42%
N/A
N/A
6.46%
$502
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
Mercer KiwiSaver - High Growth
N/A
2.36%
N/A
N/A
7.29%
$517
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
Mercer KiwiSaver - Shares
N/A
3.03%
N/A
N/A
7.96%
$492
Performance is up to 31 July 2020. Rates are after total fees and assume a 10.5% prescribed investor rate (PIR).
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Funds descriptions

There are seven main Mercer KiwiSaver managed funds to compare, each with a different level of risk. Riskier funds tend to hold more growth assets such as equities and properties, while conservative funds mainly consist of defensive assets. Such assets have lower levels of volatility and usually include cash and fixed interest.

Below is a list of the available Mercer KiwiSaver funds, organised from least to most risky.

  • Cash Fund. The Cash fund is ideal for investors who withdraw cash frequently. It delivers lower returns but comes with low volatility and risk.
  • Conservative Fund. Mercer’s Conservative KiwiSaver fund is suitable for investors who are risk-averse, yet looking to gain moderately higher returns than investing solely in cash. Approximately 80% of the fund is invested in defensive assets.
  • Moderate Fund. This fund is ideal for investors looking to achieve moderate gains. It is weighted 65% to defensive assets, 24% to cash and 23% to equities.
  • Balanced Fund. With Mercer’s Balanced Fund, you get a nearly equal allocation to both growth and defensive assets, making it ideal for those who desire balanced long-term returns.
  • Growth Fund. The Growth fund is suitable for those intending to invest mainly in growth assets. It has a 75/25 allocation to growth and defensive assets respectively.
  • High Growth Fund. The High Growth fund invests almost exclusively in high growth assets (90%), with only 10% of the fund allocated to cash and fixed interest. This fund often comes with a higher level of risk and returns.
  • Shares Fund. The Shares fund comprises 74% in international equities and 26% in Australasian equities. It is a great choice for investors who are actively seeking higher returns in spite of higher volatility and risk.

Mercer KiwiSaver fund fees

Mercer’s KiwiSaver schemes generally come with two types of fees that you should watch out for.

  • Fund fees. Mercer’s fund management fee ranges from 0.37% to 0.98% per annum. The more complex and risk-on the fund is, the greater the fund management fee.
  • Administration fees. The administration fee is a monthly $2.25 fee ($27 yearly) which covers the day-to-day administration of your Mercer KiwiSaver fund. This fee is waived for those aged 17 and below, and for those with a balance of less than $1,000.

Remember to check with Mercer on the exact fund fees you might have to pay before investing in their KiwiSaver scheme. The precise amount in fees could depend on your fund type and KiwiSaver balance.

What other products does Mercer offer?

Besides its KiwiSaver schemes, Mercer offers two other investment funds: the FlexiSaver scheme and the Mercer Super Trust.

The FlexiSaver scheme is intended for those who dislike locking up their cash in accounts without the option to withdraw at ease. This scheme allows investors to access any one of the seven Mercer KiwiSaver accounts but with greater flexibility for withdrawals.

You may also get a joint account under the FlexiSaver scheme if you and your spouse want to both invest in the same fund. However, do note that this scheme comes with different fee types and taxation rules compared to Mercer’s standard KiwiSaver plans.

The Mercer Super Trust is workplace savings scheme that is intended for investing retirement funds. If you’re interested in such a plan, you should first check with your employer if they have already set up a scheme under the Mercer Super Trust.

How to apply

Anyone aged 18 and above can register directly through Mercer’s website. Mercer will get in touch with you and help you access your online Mercer KiwiSaver account.

If you are under the age of 18c, or if you do not wish to sign up online, there is a paper application form for you to fill in. You can download this form from Mercer’s website. Once you have completed the form, post it back to Mercer and wait for them to reach out with confirmation.

Eligibility criteria

To invest in Mercer’s KiwiSaver fund, you must first be eligible to join their scheme. You need to be:

  • A New Zealand citizen,
  • Entitled to live in New Zealand indefinitely

If you are holding a temporary student, visit or work permit, you will not be eligible for the KiwiSaver scheme.

Documents required

You may need to have the following on hand during your application.

  • IRD number (and your accurate PIR)
  • Driver’s licence

Summary

Mercer offers seven KiwiSaver investment funds to help you grow your wealth and save up for retirement. These KiwiSaver plans come with free financial advice, transparent pricing and varying risk levels to suit your investment preferences.

Whether you’re saving for your first house or looking to earn passive income over your retirement years, a Mercer KiwiSaver fund could be a great fit for you.

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