Inside Money: Children of the GFC - are the KiwiSaver kids alright?

How much money have KiwiSaver babies made over the past five years? Photo / Thinkstock

While going for coffee with an investment consultant last week he reminded me that it's been five years since the GFC became a leading media acronym.

Disappointingly, at least one online acronym compiler has failed to include the real meaning of GFC in its list, which mentions Global Fighting Championships, Garretts Fried Chicken, Girls for Christ and God Fearing Christian but no Global Financial Crisis.

But the five-year anniversary of the true GFC is probably an ideal time to reflect on whatever passes for normality these days (it's new at least).

There are undoubtedly numerous economic and social statistics worth drawing on that would help paint the GFC Plus Five as a big picture, but I've gone for a miniature approach titled 'Kids in KiwiSaver (KIK)'.

The KIK sector serves as a pretty good proxy for the performance of investment markets post GFC, particularly if we limit analysis to the sub-group of under 18-year-olds who joined KiwiSaver early in the scheme's life.

The launch of KiwiSaver in July 2007 coincided almost exactly with the onset of the GFC, which peaked just over a year later with the collapse of Lehman Brothers in September 2008.

Markets began recovering, sort of, the following year but the KIK cohort who'd enrolled in a scheme prior to that would've most likely have seen their $1,000 government sign-on bonus shrink very quickly.

Disregarding the essential nuttiness of giving $1,000 KiwiSaver 'kick-start' to babies, I, like many thousands of others, enrolled my children in schemes - very close to GFC ground zero.

According the Financial Markets Authority (FMA) latest KiwiSaver annual report, dormant KIK accounts make up a large proportion of the "46.3 percent [of KiwiSaver members], regarded as non-contributors".

And that's why the KIK GFC cohort provides an interesting measure of post crisis investment performance: assuming no further contributions (a good assumption in most cases, including mine), the fate of the $1,000 kick-start offers an almost pure view of investment performance less fees over a five-year period.

As at September, the two (high growth) KIK accounts under my purview reported values of $883 and $956 respectively.

Admittedly, this is a small sample but feel free to contribute more data to this survey, showing KIK sign-up date, investment option, current value and, if you like, scheme name. (If you're one of those parents who have contributed to KiwiSaver on behalf of your KIKs please don't reply, it will only mess up the numbers and make the rest of us feel irresponsible).