Kiwibank cash PIEs top a billion dollars
Kiwibank's cash PIE funds have topped a billion dollars just four months after the launch of its financial planning division and amid stiff competition from the term deposit war.
Wednesday, July 22nd 2009, 9:56PM
by Paul McBeth
The bank's wealth advisers have had "considerable growth" since officially starting work in March, according to wealth general manager Tracey Berry, and she's ecstatic with the success to date.
"We had big growth for last month in cash PIEs," Berry said. "The difficult part is raising awareness for those people on higher incomes who get tax incentives from a PIE."
The billion dollar mark is an important milestone for Berry, who is pleased the new unit has been able to remain competitive in a tough environment. The intensifying competition in the term deposit space has squeezed some customers away from PIEs as people look to fix in short-term gains, but that won't always give them the greatest long-term return, she said.
Term deposits grew 15% to $93.1 billion in May, according to the latest central bank statistics, from the same month a year earlier, despite interest rates tumbling over the same period.
Similarly, the average annualised returns for cash PIEs has taken a dive in the past 12 months to 4.85% from 6.72%, according to FundSource's managed fund performance statistics, as the central bank has slashed the official cash rate to a record-low of 2.5% from 8.25% in July last year.
Paul is a staff writer for Good Returns based in Wellington.
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