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 remarkable milestone—a *500% return on their self-managed KiwiSaver portfolio since 2022.
This achievement wasn’t just a matter of luck. It was the result of disciplined investing, long-term thinking, and a focused strategy. In this article, we’ll explore how this investor accomplished such an extraordinary result, the tools we used to implement their strategy, and the valuable lessons KiwiSaver members can apply to grow their own savings.
While the results of this strategy are impressive, it’s important to note that such concentrated investment approaches come with significant risks. They’re not suitable for everyone and require:
A deep understanding of the investment,
Experience in managing investments, and
The ability to stay disciplined in volatile conditions
*Please note: Past performance isn’t indicative of future performance. Concentrated investment strategies carry a high degree of risk and are only suitable for experienced investors with a thorough understanding of these risks.
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 insights for any KiwiSaver member:
1. Embrace Long-Term Thinking
KiwiSaver is a retirement savings vehicle, perfectly suited for patient and disciplined investing. Staying the course allows you to benefit from market recoveries and the power of compounding over time.
2. Stay Consistent
Regular contributions using dollar-cost averaging help you invest steadily, regardless of market volatility. This approach ensures you buy more units when prices are low, potentially boosting your long-term returns.
3. Understand Your Risk Profile
A concentrated portfolio, like this example, isn’t suitable for everyone. If you prefer a more balanced approach, choose diversified KiwiSaver funds that align with your risk tolerance and long-term goals.
4. Explore KiwiWRAP for Customisation
If you’re seeking greater control over your KiwiSaver investments, KiwiWRAP offers unmatched flexibility. Allocate funds to specific securities or create bespoke strategies tailored to your objectives.
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.
