Before 1 October, earnings on your Whai Rawa account were calculated based on your daily balance and added to your account quarterly.
Since 1 October, the Whai Rawa Fund has been unitised.
How do units work?
When your contributions are allocated to the fund, they join a pool of assets from other members invested in that same portfolio. To keep track of the value of each person’s share of the pool, the total value of the assets in the pool is divided into units of equal value. Units are then allocated to your account, according to the amount of your contribution and the entry unit price at the time of your transaction.
What are Unit Prices and what do they mean?
As you may know, the Whai Rawa Fund operates quite differently to bank accounts or term deposits. It does not have set interest rates, but instead the value of your savings rises or falls depending on changes in the price of the investment assets owned. Unit prices are used to help track changes in the value of your Whai Rawa account.
When you deposit money into your Whai Rawa account, your money is invested into Mercer Investment Trusts New Zealand’s Socially Responsible Conservative Portfolio. Each investment you make in the Whai Rawa Fund is divided into a number of units that represent your proportionate share of the Whai Rawa Fund.
So, by tracking the unit price, you can tell whether the investments are going up or down in value (because the unit price will rise and fall too). Of course, you can also track how things are going by looking at movements in your savings’ balance – but this might change because of withdrawals or contributions. Tracking those movements will tell you whether your own Whai Rawa savings are growing, whereas tracking changes in unit prices will tell you how well the Whai Rawa Fund is performing.
What difference will I see?
The big difference will happen immediately, but only be noticeable when the new digital platform is up and running early in 2020. You’ll notice then that the value of your Whai Rawa savings is being calculated and available daily. The number of units you own, and their value will appear alongside your account balance when you check your account. This will be a major difference from the current online platform.
Questions? Get in touch with us today.