ASB: KiwiSaver bounces back

KiwiSaver fund performance has rebounded in the first few months of 2019, more than recovering last year’s losses after a volatile quarter in the markets saw many member balances dip.

Thursday, May 2nd 2019, 1:22PM

In the first three months of 2019, ASB’s growth fund performance was 9.11% after tax and fees, significantly higher than the -8.14% seen in the previous quarter in the same fund.

The S&P/NZX50 was up 11.7% over the same period, Australian shares 10.9% and the MSCI World Index 11%.

Morningstar said all the KiwiSaver funds it surveyed had positive results in the quarter.

ASB head of KiwiSaver Aidan Vince said the bounce back was a reminder of the long-term nature of the savings vehicle.

“We always encourage our members to make a plan for their KiwiSaver and then stick to it. There are always going to be ups and downs so having a fund aligned to your plans mitigates this. 2018 was a volatile year for local and global sharemarkets, particularly in the fourth quarter, which did impact KiwiSaver balances. While we understand this can be uncomfortable for members, it’s important to get a plan and stick to it – we’ve seen the benefits of that over the last three months,”he said.

“This volatility has also been seen in more conservative funds although to a lesser degree. But our message to members is the same – get in a fund that aligns with your investment plan. People looking to use their KiwiSaver in the next few years should have less invested in shares than those investors with a longer time frame. It has been pleasing for us to be able to help our investors continue to focus on plans that help them achieve their long term goals."

Understanding the value of regular contributions to KiwiSaver was also important, especially in times of volatility.

“When you invest in a KiwiSaver fund, the price for the units you buy will vary day-by-day. But all of the units you own are worth the same when you see them totaled up as your KiwiSaver balance. In periods like the end of last year, you could buy units at a lower price than you could have the month before. It’s the time to think your retirement is ‘on sale’.”

Morningstar's top performers:

Simplicity Conservative 4.6% (Multisector Conservative),
AMP Income Generator 6.9% (Multisector Moderate),
Summer Investment Selection 7.8% (Multisector Balanced),
ANZ Default Growth 11.0% (Multisector Growth), and
Booster Geared Growth 14.3% (Multisector Aggressive).

Tags: ASB KiwiSaver