Our hedging policy is set using the market average hedging ratios of providers that make up at least 80% of KiwiSaver industry funds under management, resulting in our equity investments being 50% hedged into New Zealand dollars. The hedging policy will be monitored quarterly and adjusted from time to time to follow the average within a range 40% - 60%.
The foreign exchange exposures in each Fund are hedged as follows:
Asset class | Hedging style | Benchmark (%) | Range |
International shares | Passive | 50 | 40 to 60 |
International fixed interest | Passive | 100 | 95 to 105 |
International markets are accessed through a series of index funds managed by DWS.
For the remaining international equities, 50% of the exposure is invested in the Simplicity Hedged Global Share Fund is fully hedged into New Zealand dollars and 50% into the Simplicity Unhedged Global Share Fund.
For international bonds, we invest in the Simplicity Hedged Global Bond Fund that is fully hedged into New Zealand dollars.
The hedging strategy is managed by DWS.