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$6.3 billion wiped off KiwiSaver

Morningstar reveals another bad quarter for KiwiSaver funds.

Friday, August 12th 2022, 8:25AM 3 Comments

by Jenni McManus

Market turmoil during the past six months has wiped $6.3 billion from KiwiSaver funds, $4.6 billion of it in the past three months.

Morningstar’s KiwiSaver survey for the June quarter 2022 reveals KiwiSaver funds now hold $82.2b in assets, compared with $87.3b in the March 2022 quarter and $89b in December last year. However, this year’s June quarter figure is only slightly down from June 2021, when KiwiSaver funds held $83b in assets.

In explaining the downturn, Tim Murphy, Morningstar’s Asia-Pacific director of manager selection, painted a gloomy but by now familiar picture of world markets racked by war, global GDP contraction as the Chinese and Russian economies slow, household spending falling short of expectations in the US and higher-than expected global inflation.

In New Zealand, the S&P/NZX50 was down 10.2%, with large caps Fletcher Building, Fisher & Paykel Healthcare and Mainfreight reporting negative quarters. Only Spark showed a positive return (4.8%). The Australian sharemarket also performed badly.

“KiwiSaver funds generally reflected the challenging underlying market conditions experienced over the June quarter,” Murphy said.

Top performers for the quarter included QuayStreet Income (-2%, conservative fund), Juno (-3.5%, moderate), InvestNow Castle Point 5 (-3.7%, balanced), QuayStreet Growth (-5.3%, growth) and Aon KiwiSaver Russell (-7.9%, aggressive).

Of the six default funds appointed last year (BNZ, Booster, Kiwi Wealth, Simplicity, Super Life and Westpac), Morningstar said there had not been enough time to properly assess performance. But in the year to date, four of the six had trailed the balanced category average.

Morningstar says it prefers to assess fund performance on long-term returns. Over the past 10 years, aggressive KiwiSaver funds returned an average of 9.3%, growth 9%, balanced 7.3%, moderate 5.2% and conservative 4.5%.

Morningstar reports fund returns after fees but before tax.

The six largest KiwiSaver funds account for 69% of the assets on the Morningstar database. ANZ is the biggest with $17.1b in assets, ASB has $13.2b, Westpac $8.8b, Fisher Funds $6.4b, Kiwi Wealth 6.3b and AMP $5.4b.

Tags: KiwiSaver

« A cluster of ‘modest’ accounts: what KiwiSaver balances really look likeParker quietly tables proposed $225m KiwiSaver tax »

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Comments from our readers

On 12 August 2022 at 9:56 am Tash said:
The financial services sector is it's own worst enemy sometimes. Why would we be surprised when clients aren't interested in what we have to offer? Can we please stop saying things like... value was 'wiped from'? Where has this gone? Who snaffled it? How can this have been allowed to happen? who is to blame for this? Is it lost forever? Strange, I thought this might be good opportunity to buy not be scared off, but then maybe I'm weird.

I get that the mainstream media might have a reason to use such emotional (and I'd argue misleading) language, but not us

How much has been 'wiped from' the housing market in the last three months? I think you'll find it's much more than $6.3 billion. Has the real estate industry said $ x in value has been 'wiped from' houses?
On 12 August 2022 at 3:18 pm SteveG said:
Well said Tash. If you didn't know better you might have thought that the KiwiSaver providers caused the global inflation crisis, the energy and food supply crisis and the war in Ukraine. May as well throw climate change and Covid in there for good measure!!!
On 12 August 2022 at 4:29 pm Austin Fisher said:
Just logging in to completely agree with Tash.

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