KiwiSaver bounces back

A solid quarter has seen KiwiSaver investments shake off the impact of Brexit-induced market turmoil.

Wednesday, October 26th 2016, 2:39PM

Morningstar has released its latest KiwiSaver report, which shows all options returned positive results over the September quarter.

After market wobbles earlier in the year dented their fortunes, growth-oriented funds returned to outperforming their more conservative counterparts.

Morningstar said this was a return to normal expectations of risk/return profiles.

Quarterly returns ranged on average from 4.32% for aggressive multi-sector vehicles through to 1.61% for conservative funds. Over the year to 30 September, average returns ranged from 10.27% (growth) to 6.66% (conservative).

“Investment markets rose in the third quarter, as the impact of the Brexit vote in June wore off,” Morningstar Australasia director of manager research Tim Murphy said. “The Kiwi sharemarket had a very strong July, and finished the quarter with a 6.7% return. This healthy market performance translated into positive quarterly results from KiwiSaver funds, particularly benefitting options with higher allocations to growth assets.”

The Fisher TWO KiwiSaver Cash Enhanced was the strongest performer in the multi-sector conservative category (2.03%) over the September quarter, and Aon Lifepoints Moderate (2.88%) was on top in the multi-sector moderate category.

Aon Lifepoints Balanced took pole position among multi-sector balanced funds (3.67%). BNZ KiwiSaver Growth was the best-performing growth fund in the September quarter (4.56%), while Booster KiwiSaver Geared Growth took the top spot among multi-sector aggressive funds (5.65%).

In some cases, the provider that savers chose could make as much difference as the type of fund they were in.

Some of the conservative funds have been outperforming their riskier peers.

Aon Russell’s Lifepoints conservative fund has returned 8.8% per year over the past five years, better than AMP and Booster’s balanced schemes.

Over one year, it returned 8.6%, which also put it ahead of Kiwi Wealth’s balanced scheme, OneAnswer’s balanced scheme and Booster’s AC growth scheme.

Over the five years to September 30, ANZ’s OneAnswer KiwiSaver Growth has produced the strongest performance among the growth multi-sector funds, returning 13.9 per cent per year.

FANZ Lifestages KiwiSaver Income had a tough quarter. The fund’s exposure to growth assets consists of property and infrastructure. With no exposure to equities, domestic or international and a heavy weighting to New Zealand and global fixed interest, the fund struggled against peers and the category index.

It returned 5.1% over the year, well down on the 6.7% average for the conservative group

Tags: KiwiSaver Morningstar