Trustees Executors Private Wealth provides a one team approach, a total wealth management service where you can get everything sorted in one place.
Trustees Executors Private Wealth provides a one team approach, a total wealth management service where you can get everything sorted in one place.
Find out how Trustees Executors can help you, whether you are looking for funding from one of the charitable trusts we administer, or are looking to establish a legacy of your own.
We all want a secure financial future for ourselves and those we care about and where you turn for advice is one of the most important decisions you’ll make. Trustees Executors Private Wealth provides a one team approach, a total wealth management service where you can get everything sorted in one place.
Knowing you have taken the right steps to ensure your loved ones are cared for after you're gone is what estate planning is all about.
Talk with one of our Private Wealth experts who will work alongside you to help you make the most of our services.
There are many ways to grow and protect your wealth, and our skill is to help you understand your choices and create and implement a personal wealth strategy to suit your needs. It all starts with a plan.
We are uniquely placed in the market as the only provider of fund administration, corporate trustee and wealth services in New Zealand.
We are uniquely placed in the market as the only provider of fund administration, corporate trustee and wealth services in New Zealand.
We are uniquely placed in the market as the only provider of fund administration, corporate trustee and wealth services in New Zealand.
Expertise you need, service you deserve. As your trusted and independent licensed supervisor, we deliver our regulatory leadership through collaborative partnerships that protect the interests of your investors.
For more than 25-years we have been leading providers of custody, investment accounting and unit pricing services to the managed fund industry.
For more than 25-years we have been leading providers of custody, investment accounting and unit pricing services to the managed fund industry.
Aug 31, 2022
Financial literacy is something that everyone needs, but financial topics can often be misunderstood. To have the best chance of achieving your financial goals and building financial resilience, education is equally as important as action. At Trustees Executors, we continue to emphasise the importance of financial literacy to our clients and all New Zealanders. Our first article in this series was learning about Hedging, and this article will introduce a new topic.
Our second topic is Dollar Cost Averaging (DCA). Like hedging, DCA is a regular phrase used in financial markets. This article covers the core concepts of DCA and what type of investments typically involve this method of investing.
The concept behind dollar-cost averaging is straightforward: at regular periods, you invest the same sum of money in a certain investment. Investors do this to lower their risk of making a large investment in a single investment at an unfortunate time. For instance, you invest $100 in an investment every month, regardless of the price. A good example of dollar-cost averaging most of us already do is your KiwiSaver.
As a result, you can use your allocated funds to purchase more of an investment when the price is lower. Additionally, you purchase less when the price is high. This makes the average price per share lower, which lowers your investment risk.
There are several investment options you can choose from when using the DCA method, depending on your level of experience.
Direct Shares
Shares are one of the most simple options for DCA. A DCA approach may be used on several reliable blue-chip and mid-cap shares that are within various price ranges. Investment platforms allow you to automatically dollar-cost average by setting up recurring payments for certain shares. This strategy is easy to understand and to establish if you would like to try DCA.
Real estate investment trusts (REITs)
Shares of a combined portfolio of real estate assets make up REITs. This is a good option to participate in the real estate market with some volatility protection, especially through shares of publicly listed REITs. Additionally, they may be acquired through stock market transactions. You can use DCA to buy into REITs at regular intervals.
Exchange-traded Funds (ETFs)
ETFs have curated portfolios of shares and other financial instruments that are traded publicly. ETFs exist to serve various risk profiles and frequently mirror an underlying index, such as the NZX50 in New Zealand or the S&P500 in the US. Similar to shares, buying shares of an ETF using a dollar-cost averaging technique is a simple way to build a diversified portfolio with a rising position. Through ETFs, you can have entry-level access to invest in larger companies that have a proven track record of returns.
Unlisted Funds
These funds are ownership structures, often Portfolio Investment Entity (PIE) used to own a range of underlying assets. These assets can be one or a combination of asset classes such as Cash, Bonds (Fixed Interest), Listed or Unlisted Property, shares, commodities (eg: iron ore, gold) or other sub-sets of these. Most KiwiSaver funds are of this nature. Some are “multi-asset” funds while others are single asset funds. Some funds have an ‘active style’ whereby the manager seeks to pick assets with a view to beating an index. Other funds follow a ‘passive style’ where the manager sets and follows a set of rules for buying and selling that seeks to achieve returns that match a certain index. Unlisted Funds are not traded on an exchange but require an application to buy or sell. Costs of buying and selling are generally quite low for unlisted funds when compared to listed funds where some form of brokerage will be paid. These funds are ‘unitised’ where you buy or sell units, for which the value is normally established daily. You will buy and sell these units at the value of the underlying assets whereas with listed funds you may be buying at a value greater than the underlying assets or conversely at a value less than the underlying assets.
For example:
Buy $100.00 of units at $1.00 a unit = 100 units. Value of holding = $100.00
Price of unit falls to $0.50. Buy $100.00 of units = 200 units. Total unit holding = 300. Total value of holding = $200.00
Price of unit rises to $1.00 a unit. Total value of holding goes to $300.00, for only $200.00 invested.
When investing, it is always important to understand what you are investing in and how your investment strategy will support your financial goals. That often means not only becoming financially literate before you invest, but doing research into various industries, businesses, and financial instruments.
DCA is a good option if you are looking for an investment strategy that can adjust to market volatility. This article does not cover all aspects of DCA, and we encourage our clients to ask questions. If you would like to learn about how our advisers can help you understand more about investing, develop your own financial skills, manage your investments, or help you reach your financial goals, reach out to us today.
Trustees Executors Limited was established in 1881 and is New Zealand’s first Trustee Company.
We provide a full range of financial and trust solutions to individuals, families and the corporate sector, including estate planning, trustee and investment advisory services.
We are a Licensed Financial Markets Supervisor and a leading provider of specialist Corporate Trustee and back-office fund administration services to some of New Zealand’s largest financial institutions, banks and fund managers.
Copyright © 2024 Trustees Executors Limited – All Rights Reserved. No information or material can be copied or distributed without our express permission.