KEY POINTS:
The most conservative KiwiSaver funds largely posted positive returns in the last year amid market declines, while the most aggressive performed the worst, researcher Morningstar said.
The introduction of KiwiSaver has coincided with large falls in world sharemarkets, meaning those options containing a large proportion of cash and fixed interest assets have performed the best. Those included the conservative funds and the default options.
Four of the five default options surveyed posted positive returns for the year ended September 30, with AMP and Tower topping the list.
The top-performing fund was Fidelity KiwiSaver-Options Kiwi Fund, managed by Tyndall, which returned 23.3 per cent on its $6 million in assets.
However, Morningstar warned that that fund's investment strategy was based on derivatives contracts written on movements in 10-year government bond rates, which meant there was the potential for substantial volatility.
Overall, Brook Asset Management, Fidelity Life, AMP and Tower had the best-performing funds.
All equities-based options were down sharply except for the AonSaver AMT KiwiSaver Milford Aggressive Fund, which returned 7.6 per cent for the year.
"While many Kiwis have been waiting with bated breath to see how the different fund managers have performed, we hope dinner party conversations don't focus solely on these short-term numbers," Morningstar senior research analyst Chris Douglas said.
"Superannuation is an investment designed to grow over the long term to produce retirement income, and this needs to be kept firmly in mind when considering these initial returns.
"The growth-oriented funds - those which have been hardest hit by recent market declines - remain the KiwiSaver options with the greatest potential for increasing the value of retirement savings," Mr Douglas said.
Factors pointing to good quality fund managers included a stable and experienced investment team; a clear investment process and philosophy; a stable parent; and low fees and costs.
The survey results were after fees but before tax.
- NZPA
