How One Client Achieved Over 500% Returns with a Self-Managed KiwiSaver Strategy
At Compound Wealth, we’re passionate about helping Kiwis grow their retirement savings. While every investor’s journey is unique, one of our clients has achieved a truly remarkable milestone—a 500% return on their self-managed KiwiSaver portfolio since 2022.
This wasn’t a stroke of luck; it was the result of disciplined investing, long-term thinking, and a focused strategy. Let’s explore how they did it, what tools we used to implement the strategy, and what lessons KiwiSaver members can take away to grow their own savings.
What is a Self-Managed KiwiSaver?
A self-managed KiwiSaver allows investors to take control of their retirement savings by selecting specific securities rather than relying on a managed fund. This approach is best suited for confident, hands-on investors who are prepared to research, monitor, and manage their investments actively.
For this client, the self-managed KiwiSaver option offered the flexibility to pursue a highly concentrated strategy that ultimately delivered life-changing results.
A Bold and Concentrated Strategy
From day one, this investor pursued a bold strategy:
· Portfolio Composition: 99% equities and 1% cash.
· Major Holdings: Significant positions in Tesla (TSLA), MicroStrategy (MSTR), Rocket Lab (RKLB), Berkshire Hathaway (BRK-B), NVIDIA Corporation (NVDA).
Rather than spreading their KiwiSaver funds across a broad range of assets, they focused on just a few high-conviction investments. While this level of concentration carries risks, it also offers the potential for exceptional returns when those investments perform well.
Using the KiwiWRAP KiwiSaver Scheme
To implement this bespoke strategy, we utilised the KiwiWRAP KiwiSaver Scheme. Unlike many traditional KiwiSaver providers, KiwiWRAP allows investors to gain significant exposure to direct securities without preset caps.
This flexibility was critical for this client’s concentrated approach. It provided the freedom to allocate their portfolio to high-conviction stocks like Tesla and MicroStrategy, which played a major role in achieving their extraordinary 500% return.
For investors who value customisation and control, KiwiWRAP is a game-changer. It’s a platform designed for those who want to actively manage their investments and go beyond the limitations of traditional KiwiSaver funds.
The Power of Dollar-Cost Averaging
A critical component of this client’s success was their commitment to dollar-cost averaging (DCA). Even during periods when the market was declining, they continued to invest consistently.
By purchasing shares at lower valuations, they reduced their average cost per share and positioned themselves for exponential growth during the recovery. This disciplined approach highlights the importance of investing through downturns rather than trying to time the market.
How KiwiSaver Encourages Long-Term Thinking
One unique feature of KiwiSaver is that it naturally supports long-term investing. Since KiwiSaver funds are generally inaccessible until age 65 (with some exceptions, like first-home purchases), members are less tempted to react emotionally to short-term market fluctuations.
For this client, this structural advantage was critical. It allowed them to ignore daily market noise, stay invested during downturns, and remain focused on their long-term goals.
For KiwiSaver investors, this long-term lock-in period can be a powerful ally in managing market volatility. It helps reduce the likelihood of panic selling and encourages disciplined contributions over time.
Lessons for KiwiSaver Investors
While this client’s strategy isn’t suitable for everyone, there are valuable lessons for any KiwiSaver member:
1. Embrace Long-Term Thinking KiwiSaver is designed for retirement savings, making it the perfect vehicle for patient, disciplined investing. By staying the course, you can benefit from market recoveries over time.
2. Stay Consistent Regular contributions through dollar-cost averaging help you invest steadily, even during volatile markets. This strategy ensures you buy more units when prices are lower, improving your overall returns.
3. Understand Your Risk Profile A concentrated portfolio like this one isn’t for everyone. If you prefer a more
balanced approach, consider diversified KiwiSaver funds that match your risk tolerance and goals.
4. Consider KiwiWRAP for Customisation If you want greater control over your KiwiSaver investments, KiwiWRAP offers unparalleled flexibility to allocate funds to specific securities, opening the door to bespoke strategies like this one.
Ready to implement a self-select strategy?
Are you an experienced investor or someone who wants more control over your retirement savings? A Self-Managed KiwiSaver, DIY KiwiSaver, or Open Architecture KiwiSaver could be the solution you've been searching for. These schemes empower you to tailor your portfolio to your unique investment preferences, offering unparalleled flexibility and the freedom to self-select your investments for a more hands-on approach to your financial future.
Ready to Take the Next Step?
Visit our CompoundPro page for more information.
At Compound Wealth, we specialise in helping Kiwis make the most of their KiwiSaver by tailoring strategies to their unique goals. If you’re ready to take control of your retirement savings, contact us today or complete our Compound Pro Quiz.
Compound Wealth are a KiwiSaver, Retirement and Private Wealth Financial Advice Firm based in Mount Maunganui, Bay of Plenty with clients all over New Zealand.
