KiwiBank and Gareth Morgan up a tree … [updated]
So KiwiBank is to buy out Gareth Morgan Investments, including the Gareth Morgan KiwiSaver Scheme—a case of the politically appointed “People’s Bank” buying out the self-anointed “People’s Financier.”
KiwiBank’s CEO Paul Brock reckons “The ‘aligned values’ of the two businesses reinforced the decision to buy rather than build.”
Rarely has a truer word been spoke. Their “values”are aligned—and in more ways than one:
- KiwiBank was set up by a political tool with truckloads of taxpayer money to help resurrect the tool’s political career. Meanwhile, the Gareth Morgan KiwiSaver Scheme was set up by a political fool eager to use his notoriety to attract money from gullible fools, and to suck down loads of taxpayers’ money.
- As a bank KiwiBank is simply a welfare case; a bank set up with taxpayers’ money to do things profit-seeing banks wouldn’t and unable to survive in the market without frequent injections of ever-increasing tranches of OPM to prop up its credit rating—at the extraction of which from successive Ministers of Finance it has proved outstanding. Meanwhile, the Gareth Morgan KiwiSaver Scheme has taken advantage of what is little more than a welfare programme for suits, at the exploitation of which it has proved exceptional.
- And finally, KiwiBank has delivered the worst return on capital of any bank in the country. While year on year the Gareth Morgan KiwiSaver Scheme has proved to be the worst performing KiwiSaver scheme in New Zealand.
These are two entities clearly made for each other.
So now the directors of Gareth Morgan Investments are eager to get a payday for their consistent underperformance. And with this buyout of industry-leading underperformers, KiwiBank has once again confirmed their own.
UPDATE: Taking time today out of his busy schedule writing another book about how good he is, Gareth Morgan responded today to criticism of his funds’ less than stellar performance (his balanced fund has returned a negative - 0.1% per annum since inception; its “growth fund” a negative -3.4% p.a.; its conservative fund faring better at a positive 2.4% p.a, which still however sees his investors losing against inflation) blaming, in order, the ignorance (of others), the financial illiteracy (of others), and the league tables produced by ratings agencies Morningstar and Fund Source—who shamefully use actual figures instead of the ones provided by the voices in Gareth Morgan’s head—before pausing to point out his funds had done brilliantly against the “benchmarks” in his head.
He also said a “key focus” for GMI with respect to its KiwiSaver funds was “wealth preservation,” at which performance he maintained anyone criticising his growth portfolio’s return of negative 13.1% just doesn’t understand risk like he does.
He then touted for KiwiBank’s Kiwisaver work, before heading off to the travel agent to book his next holiday.