KiwiSaver funds bounce back into the black

KiwiSaver funds bounced back into the black last quarter after having a rough start to the year. Photo / Steven McNicholl

KiwiSaver funds bounced back in the second quarter of this year, recovering ground lost in the first three months.

Morningstar Research shows average returns across the different KiwiSaver categories were back in the black for the three months to June 30.

They ranged from an average of 1.44 per cent for the conservative category up to 4.56 per cent for the aggressive category.

That was a turnaround from the first three months of this year, when most KiwiSaver funds plunged into the red.

Chris Douglas, director of manager research ratings at Morningstar, said global markets posted healthy returns during the second quarter of the year, boosting funds with a bias towards growth assets like shares and property.

"In general, it was an impressive quarter for KiwiSaver funds, with all options producing positive results over the three months."

The top-performing funds over the quarter were the ANZ Default KiwiSaver scheme conservative fund in the conservative category, which returned 1.85 per cent; the Summer Investment Selection fund, with 5.5 per cent, in the balanced category; and the Generate KiwiSaver growth fund, which returned 5.85 per cent in the growth category.

The strong quarter helped boost annual returns with the average return over one year ranging from 4.73 per cent for the conservative category to 13.1 per cent for the aggressive category.

Douglas said it was most appropriate to look at the long-term returns of a fund to judge its performance.

Over 10 years the best performer has been Milford's Active Growth Fund, which has had an average annual return of 13.4 per cent.

Fisher Funds KiwiSaver growth fund was another top performer, with an average annual return of 9.5 per cent, he said.

Both funds had changed their approach to investing over the 10 years.

Douglas said ANZ's KiwiSaver scheme had also been a notable performer, which was "all the more pleasing" given it had followed the same investment process over the timeframe.

ANZ remains the biggest KiwiSaver provider by far, managing $12.3 billion worth of money and claiming a 25.2 per cent share of the market.

ASB is the second largest at $8.9b, with an 18.2 per cent stake, while Westpac Bank is third, with $5.7b and an 11.8 per cent share.

Between ANZ, ASB, Westpac and BNZ, the four big banks manage nearly two-thirds of the money invested in KiwiSaver.

Funds invested in the scheme rose from $45.8b in December 2017 to $48.8b as of June 30.