Biggest has baddest returns
Almost all diversified KiwiSaver funds in the Melville Jessup Weaver survey for the December quarter achieved positive returns with growth funds averaging about 4% and conservative averaging about 15 after fees but before tax.
Friday, January 24th 2025, 8:20AM
by Jenny Ruth
The latest survey found Generate's was the best performing growth fund out of the 14 funds tracked with a 5% return for the latest three months, followed by Simplicity's with a 4.8% return and ASB's with a 4.4% return, while the worst performing growth fund was ANZ's with a 1.6% return for the quarter.
Generate's $1.78 billion was also the best performer over one year with a 19.9% return as well as over three years. It ranked seventh over five years but was second out of 12 funds over 10 years.
ANZ's growth fund is third largest at $5.21 billion and it was the worst performer out of 14 funds in 2024 with a 9.8% return, as well as over three years and over five years. It was the worst performer of 12 funds over 10 years.
ASB's growth fund is the largest of the 14 at $6.44 billion and it was third best out of 14 funds for calendar 2024 with a 17.8% return. It was fourth over three years and 10th over five years but fourth out of 12 funds over 10 years.
MJW analyst Ben Trollip says global share markets, dominated by the US, returned about 2% in local currency terms over the latest quarter while the S&P 500 Index returned 23% for the year.
“Donald Trump's election win saw the US dollar strengthen, meaning that this quarter's gains were amplified for unhedged New Zealand investors,” Trollip says.
The kiwi dollar fell about 12% against the greenback in the three months, “meaning that the returns for equity managers in our investment survey (which are shown unhedged for comparison purposes) are around 10% to 15% for the quarter and 30% and 35% for the year.”
The NZ share market outperformed in local currency terms, rising about 6% in the quarter, while local bonds achieved a small positive return but global bonds produced negative returns as interest rates rose as investor fretted about Trump's immigration and tariffs policies.
“Notable casualties this quarter were real asset funds. Global listed property funds were down in the order of 7% on the back of rising interest rates. Infrastructure funds were also down and those with a sustainability bent took a bigger beating, given the 'drill, baby, drill' sentiment from President Trump,” Trollip says.
Among balanced funds, ASB's $3.99 billion fund was the best performer in the quarter with a 3.3% return while ANZ's $3.66 billion fund was the worst performer of 16 funds with a 0.7% return for the three months.
Fisher Funds' $316 million Fisher Two cash enhanced fund was the best performing conservative fund with a 1.4% return for the quarter while ANZ's $1.46 billion fund was the worst performer with a negative 0.1% return.
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