The “no-brainer” approach to investing

I surveyed some of my clients recently about why they switched to the Fusion KiwiSaver strategy. “It’s a no brainer” they said, which struck me as slightly ‘short’ at the time, as I’ve dedicated years now to making this work.  All that researching, analysing and designing a multi-manager strategy which will stand the test of time, only to have it so abruptly described, is a little unnerving.  But then the magic of those four words struck me.  The concept really is that simple.  Why would you leave such an important part of your lifetime planning, to just one fund manager and investment method, when you can spread your risk across five or six, and participate in many more opportunities? It’s just smarter.

The fact that you can eliminate two of the biggest risks to your outcome (both human), potentially save yourself tens of thousands of dollars, give yourself many times the investment options and never again have to worry what your fund manager is doing, were summed up by that simple phrase.  Another simple way to illustrate it is the following diagram;


And the great thing is, it can be applied to any type of investing, whether you’re a KiwiSaver, portfolio investor, or you’ve brought your UK pension fund over to NZ.

Right now, if you have one manager or adviser, your hopes and dreams for the future are in the hands of a few individuals, in one company, with one investment approach, and they’re as likely to underperform the industry as outperform it.  But you can replace that uncertainty with the reliability of five or six of New Zealand’s top investment managers simultaneously trying to do their very best for you.

It’s called a Multi-Manager Strategy.  Managers are chosen for their different approaches but when they’re combined, you replicate industry median returns.  To be able to engineer this median result means you can virtually eliminate underperformance.  Median results have been quite sufficient to achieve your retirement needs and now you can accurately target them.  Now you can rely on an outcome, rather than hoping for one.  Now that’s a no brainer!

Scroll to top