How will my money be invested?

All the money in the BCF Scheme is currently (i.e. as at February 2016) invested in bank deposits. Once the Scheme’s assets have reached a sufficient size (as determined by the Trustee) it is proposed that its investments will be diversified into other investment types.

The Trustee expects that these other investment types will initially be New Zealand bonds (“bonds” are loans to governments and other organisations, in return for which borrowers generally pay agreed interest for an agreed period).

Bank deposits and bonds are traditionally regarded as conservative investments, because they have lower expected risk but are likely to produce lower returns over time than growth assets such as shares and property.

The Trustee currently intends that in due course (i.e. when the BCF Scheme is large enough as determined by the Trustee) Scheme assets will be invested, subject to legislation, in one or more of the following:

  • deposits with non-bank deposit takers;
  • Brethren-owned businesses;
  • residential mortgages for Brethren members; and
  • commercial property to lease to Brethren.

The Trustee may later choose to introduce a member investment choice facility. In that case there will likely be a conservative option weighted towards bank deposits and bonds.

In determining its investment strategy from time to time, the Trustee will be assisted by an independent investment consultant (Melville Jessup Weaver).