The amount of money invested in KiwiSaver fell by $1.536 billion to $87.3b in the March quarter as markets around the world plunged in response to the war in Ukraine and fears of rising interest rates, Morningstar research shows.
Tim Murphy, Morningstar director of manager selection for the Asia-Pacific region, said KiwiSaver funds reflected the challenging underlying market condition with most of the multi-sector funds seeing a return of less than -3 per cent.
The average return for the conservative category was -3.9 per cent, for balanced funds it was -5.1 per cent and growth funds -5.7 per cent. Aggressive funds which have the highest percentage invested in shares and property fell on average -6.5 per cent.
Murphy said Covid-19 headlines took a back seat over the quarter as Russia's invasion of Ukraine caused a global shock.
"The shock reverberated through into markets, with equities declining and bond yields rising. Commodity prices soared given Russia is a key producer of several important
commodities including oil, gas and wheat."