KiwiSaver nudges $100b, Generate celebrates

KiwiSaver assets grew 6% - $92 billion to $98 billion - over the June quarter while all multisector KiwiSaver funds produced positive returns, reports Morningstar’s quarterly KiwiSaver Survey.

Friday, August 11th 2023, 6:30AM

by Andrea Malcolm

Of 23 providers offering 282 products, average multisector category returns ranged from 1.2% for the conservative category (including default options) to 5.4% for the aggressive category.

Estimated annual fees for the period were $780 million, with a projected annual fee revenue estimate of 0.80% which is the same as last quarter.

There was no change in terms of market share for Q2 this year, although the top three continued to slip. ANZ led with 20.1% of the market (down from 20.6% last June) and more than $19.6 billion AUM. ASB was in second position with market share of 15.2% (down from 16% YOY) and $14.9b in assets. Westpac’s BT held third place with 10.3% market share (down from 10.6%) and $10.1b AUM.

Fisher Funds stayed in fourth place. Its market share increased from 7.8% to 8.4% over the year, while assets grew from $6.4b to $8.2b. Meanwhile in fifth place KiwiWealth, which Fisher acquired last year, lost market share (7.7% June last year to 7.2% June this year) but assets rose from $6.3b to $7b. Milford came in sixth at 6.9% of the market and AUM $6.7b. The six largest KiwiSaver providers accounted for approximately 68% of assets in the database.

In terms of who took in the most fees, ANZ had a decisive lead with fees revenue of $180m, followed by ASB ($88m), Fisher Funds ($79.8m), Milford ($76.5m) and KiwiWealth ($65m).

Top performers for the quarter included Kiwi Wealth Default Conservative fund 2.1% (multisector conservative), Generate Moderate fund 2.7% (multisector moderate), QuayStreet Socially Responsible Investment fund 4.8% (multisector balanced), QuayStreet Growth fund 6.4% (multisector growth), and Generate Focused Growth fund 7.7% (multisector aggressive).

Default options appointed in 2021 had better results compared with the latest quarter: Simplicity Default (9.6%), Booster Default Saver (9.4%), and BNZ Default (9.4%) over the one-year period.

Generate turns 10, tops two

Boutique firm Generate, which launched a decade ago, was able to show 10 year performance for the first time and returned leading returns for two categories. In the last 10 years to 30 June 2023 the Generate Focused Growth fund created annual returns of 9.4% and the Generate Moderate fund returned 5.5% per annum. Meanwhile the Generate Growth fund ranked second to Milford over the same period, returning 8.7% to members p.a.

Generate, which had $4.3b AUM at the end of June 2023 and 4.4% market share, was ninth biggest in the market, having climbed over Booster last year from 10th place. More than 81% of its members are in growth funds, versus the market average 47%, said Generate CEO Henry Tongue. He credited advisers for some of that result.

“Over the years, our nationwide network of advisers has supported New Zealanders in choosing the appropriate KiwiSaver fund for their savings goals and the right contribution rate, meaning that many of our members have chosen growth focused funds, like our Focused Growth Fund.”

Generate, which is an active manager, looks for investments that have a positive impact on communities, such as social housing developments and New Zealand Air Ambulance, via a material shareholding in the parent company.

Since 2020, it has invested over $45 million into social housing New Zealanders with partners including the Salvation Army and Brightlight resulting in 150 homes built.

Milford topped the 10 year returns for the conservative category (Milford Conservative fund 6%), the moderate category (Milford Moderate fund 5.5%), balanced (Milford Balanced 9%) and growth (Milford Active Growth fund 10.9%).

Overall, the Morningstar Q2 Survey found that over 10 years, the aggressive category average has given investors an annualised return of 8.7%, followed by growth (8.3%), balanced (6.6%), moderate (4.6%), and conservative (4.2%).

Tags: KiwiSaver