Tue, 18 Oct 2011
KiwiSaver membership growth analysis from TOWER Investments: October 2011
KiwiSaver provider TOWER Investments has released its regular monthly analysis of the IRD’s KiwiSaver membership statistics for the month of September, 2011.
“As earlier predicted by TOWER, net total membership of KiwiSaver exceeded 1.8 million by the end of September,” said Sam Stubbs, Chief Executive Officer of KiwiSaver provider TOWER Investments.
“This significant milestone in KiwiSaver membership was achieved despite a drop in monthly average new sign up rates over the September quarter compared with the June quarter,” he said.
“In the June quarter, the sign up rate averaged 25,600 per month, whereas in the September quarter the rate slumped by 6,800 to average 18,800 per month.”
“This is the lowest monthly average rate of increase for any quarter since TOWER started compiling statistics on overall KiwiSaver membership trends.”
“Such a large drop in monthly average sign up rates could perhaps be suggesting that KiwiSaver is reaching closer to saturation point for new voluntary members.”
“Overall, net total membership growth dipped slightly to 1.04% in September, although in the workplace-related joining method categories, automatically enrolled by employer stayed steady at 1.37% growth, and opt-in via employer lifted to 0.66%.
“The noticeable drop was in opt-in via provider, or active choice sign up, which was down to just 0.90% in September, the lowest rate we have recorded for this joining method category.”
“Looking outside New Zealand’s own subdued domestic economy, it could be that huge volatility swings recently afflicting international financial markets have put some potential KiwiSaver joiners off.”
“However, this volatility patch in fact represented a great time to be buying undervalued assets like shares as TOWER has been doing in its role as a long-term investor on behalf of its KiwiSaver scheme members.”
“As a value investor aiming to acquire assets cheaply, TOWER Investments has found excellent buying opportunities in both the local and international share markets thanks to a torrent of bad news depressing other participants.”
“Other investors were panicked into losing sight of the longer-term value offered by sound companies with stable earnings prospects and healthy dividend yields and dumped these quality assets onto the market.”
“Now is a time for active and alert KiwiSaver scheme providers like TOWER to roll up their sleeves and go shopping for quality investments at attractive prices,” said Mr Stubbs.
KiwiSaver at a glance for September 2011