KiwiSaver funds weather market turbulence

Despite a rough start to the year volatile global share markets have not put a dampener on the average performance of KiwiSaver funds. Photo: Kenny Rodger.

• The average performance of KiwiSaver funds was positive last quarter
• KiwiSaver market now worth $32 billion
• ANZ bank remains the largest provider

A turbulence start to the year for financial markets has failed to put a dampener on the performance of New Zealand's $32 billion KiwiSaver industry.

Data from Morningstar shows the average return for KiwiSaver funds remained in positive territory for the first three months of the year.

Average returns ranged from 0.79 per cent for the aggressive category through to 2.65 per cent for the moderate category.

Tim Murphy, director of manager research with Morningstar, said the first three months of the year had been a story of two halves with sustained falls in share markets around the world in January and February followed by a sharp rebound in March.

"Despite a volatile first quarter in global markets, most KiwiSaver funds delivered positive performance, with more conservatively-oriented options in particular doing well.

"Strong returns from bond markets, coupled with the local share market's resilience, meant that most KiwiSaver investors' retirement savings continued to grow."

ANZ's OneAnswer Australasian share fund was the best performer of the quarter returning 6.9 per cent while the NZ Funds Growth fund was the worst falling 8.1 per cent.

Over the long-term funds managed under the Aon KiwiSaver Russell brand and by ANZ KiwiSaver continued to be at or near the top of most categories and were the most consistent performers across the board, Murphy said.

Over five years the Aon Russell Lifepoints fund was the top performer in the conservative category while Milford's KiwiSaver fund topped the balanced category and OneAnswer Growth topped the growth category.

ANZ bank remains the largest provider managing 26 per cent of all KiwiSaver money, followed by ASB (18.6 per cent) and AMP (12.5 per cent).

The amount of money in KiwiSaver grew from $30.84 billion at December 31 to $32.14 billion as of March 31.

More than 2.5 million Kiwis are a member of the retirement savings scheme.