If there was ever any doubt that KiwiSaver has been the saviour of New Zealand's retail funds management industry the latest quarterly figures from the trans-Tasman alliance of actuarial firms, Plan for Life and Eriksen & Associates, put that to rest.

The KiwiSaver statistics in isolation paint a very rosy picture for retail funds managers (ie the managers that individual punters choose to invest in).

KiwiSaver funds under management have jumped from $4.9 billion as at the end of December to just under $5.5 billion as at the end of March, the Eriksen/Plan for Life figures show. Of that growth, $447 million was accounted for out of net new money flowing into the various KiwiSaver schemes.

Awesome. Tell the Reserve Bank to ease off on those interest rate rises, New Zealanders are really getting the hang of investing in financial assets in place of those horrible houses.

We're savers now, KiwiSavers!

But maybe not. If you consider the entire retail funds management business, as measured by Eriken/Plan for Life, Allan Bollard's optimism would be diluted.

According to these whole-of-market statistics, KiwiSaver was the only retail funds sector to attract net new money over the March quarter and in the 12 months prior.

Sure, both non-KiwiSaver superannuation funds and other managed funds grew in size over the year to the end of March, propped up by rising investment markets, but investors, on a net basis, were heading for the exits.

The Eriksen/Plan for Life figures show that, excluding KiwiSaver, over $1.1 billion flowed out of the retail fund sector in the 12 months to the end of this March. Over the same period, KiwiSaver attracted net funds of $2.2 billion.

The obvious conclusion is that KiwiSaver is eating the rest of the industry. So, in answer to my headline, yes KiwiSaver is a cannibal but, on the basis of this latest evidence, the quasi-compulsory savings scheme eats outside its species too, hunting down over $1 billion of net new money for the industry in the 12 months to the end of March. For fund managers, this is mouth-watering news.


David Chaplin

  1. 8
    comments
  2. gerritQT (Queenstown)
    10:57AM Monday, 05 Jul 2010
    We changed our private superannuation fund to a kiwisaver plan when kiwisaver took off a few years ago.

    The private super plan never performed as much as it should have done due to the volatility of the markets.

    But since we changed to kiwisaver on a similar plan the returns seem to be better. And even better we are also benefitting from the $1040 government contributions. So of course we are now a lot better of.
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  3. Drum (Waitakere City)
    11:46AM Monday, 05 Jul 2010
    I would suggest that most of the people with Kiwisaver never had investments anywhere else other than in their homes anyway (that is to say the bulk of any investment, if any at all) so who cares if it's a Hannibal Lecter.

    With all the bad press to do with investments it amuses me that the investment sector behave like a used car salesmen. Pretending there is nothing wrong with the vehicle. Even if I had the money it's little wonder to me that small fry like myself are very wary. Kiwisaver has an air of being under some sort of control and transparent.
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  4. PHRED (New Zealand)
    03:48PM Monday, 05 Jul 2010
    Astonishing! The vast majority of working New Zealanders have no choice but to see part of their salary compulsorily siphoned off each week/month into a Kiwisaver account and locked away. For those on the average wage , or less, faced by wage freezes and ever rising costs there is precious little money left to put into an additional, voluntary savings plan. So it should hardly surprise anybody that the compulsory scheme is growing while voluntary schemes wither.
    1. Reply