New Zealand Dollar Decline Boosts KiwiSaver Fund Returns

KiwiSaver funds posted "impressive" returns in the six months to June 30, said Morningstar in its quarterly review of KiwiSaver fund performance and growth. "Virtually all asset classes posted positive returns over the quarter, with Australian equities and listed assets and infrastructure being the place," said Morningstar, director of executive assessments. , Chris Douglas

Global equities, where the MSCI World index rose slightly by 1.3% over the three months, posted a gain of 5.5% in New Zealand dollars.

Australian equities posted a return of 11.3% Over the same period, New Zealand commercial real estate advanced, fears of rising interest rates dissipating.

The offshore commercial real estate registered a very strong increase of 12.9%. turn in New Zealand dollars during the quarter. The kiwi fell by 2% in weighted trade terms during the quarter and by 67 US cents to 67.8 US cents, reflecting the strength of the US dollar and the depreciation of 6.2% against the Japanese yen.

On the entire KiwiSaver market the funds are invested in Australian equities, 1.4% in listed international assets, 29.4% in international equities and 18.4% in international bonds. New Zealand's fund, bonds and equities account for 44.4 per cent of total funds employed.

The scheme celebrated 10 years of operation last year and funds under management at June 30 stood at $ 48.766 billion, up from $ 45.819 billion last December and $ 36.735 billion in December 2016.

The 10-year performance statistics show a significant gap between MPAs, Australia's fourth-largest KiwiSaver operator with $ 5.219 billion under management, and the relatively solid performance of ANZ KiwiSaver funds, also owned by Australia, which dominates the market share with $ 12.267 billion in funds under management.

No ANZ fund, a relatively small growth fund, has regained its category average on a 10-year comparison basis. average of the category on a 10-year basis. ANZ KiwiSaver "has been a remarkable artist," said Morningstar.

Of all the funds, Morningstar said: "Milford Active Growth KiwiSaver is leading the performance of all multi-sector categories over 10 years", with a return of 13.4% Over the last decade, the annual return sector average was 8.4%.

He also singled out Aon Russell Lifepoints as "one of the most consistent KiwiSaver artists in all multi-sectoral categories in the long run.

On the basis of long-term returns, the results revealed that "growth funds", with a high risk appetite, outperformed risk-averse investors over 10 years. Aggressive funds. The 10-year average annual return for aggressive funds was 8.4%, compared to 6.7% for aggressive portfolios. For the quarter under review, returns in the categories range from 13.1% for aggressive portfolios to 4.73% for conservative funds.

According to the investment theory, more aggressive and risky investments will produce higher returns over the long term. the returns are volatile in the short term, while the more conservative funds earn less but are more stable.

Morningstar tables show the lion's share of funds invested with low fees KiwiSaver Simplicity's new entrant goes into its aggressive fund The group is managed with $ 70.5 million in a balanced portfolio and only 19, $ 5 million in Simplicity Conservative Fund. It does not offer "moderate" or "growth" options and took 0.8% market share to rank 13th out of 16 KiwiSaver suppliers by fund size.