KiwiSaver's growth at cost to rivals

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The introduction of KiwiSaver has eroded the market share of investment in other superannuation funds, figures from FundSource show.

A report by the NZX-owned research company reveals the $11.7 billion KiwiSaver industry is now 16 per cent of total funds under management, nearly on par with the 16.5 per cent share invested in corporate superannuation schemes.

The employer-related schemes made up 19.5 per cent of the total funds under management in the June quarter of 2007 - just before the launch of KiwiSaver.

While the market share of retail investment funds, which include superannuation investments made not via an employer, has fallen from 42.7 per cent to 36 per cent of all funds under management over the five years.

FundSource head Sam Stanley said the figures showed KiwiSaver had been the "big winner" over the last five years.

"KiwiSaver has been very successful - it has been widely embraced by the investment community."

Stanley said there appeared to be a trend of investors switching their money out of other schemes and into KiwiSaver. He ruled out the disappearance of other superannuation schemes but said they were becoming less relevant.

In the three months to June a net $95 million flowed out of superannuation funds adding to the $422 million net loss in the year to March 31.

That comes on top of a $709 million net outflow of money in the year to June 30, 2011. In the year to March 31 KiwiSaver had a net inflow of $2.862 billion although the net inflow for the three months to June 30 was down on the first three months of this year.

In the three months to March 31 KiwiSaver schemes had a net inflow of $593 million while it dropped to $500 million in the three months to June 30.

Stanley said the lower inflows were not linked to lower contribution rates from savers but appeared to be seasonal.

"We think it is because the self-employed are topping up their contributions for the end of the financial year in March 31. We will probably see another spike up ... in September."

However Stanley said fund flows into KiwiSaver could be affected in the next quarter by the first round of retirees who are eligible to start taking their money out of KiwiSaver.

ANZ Wealth had the highest increase in new KiwiSaver money getting $144.63 million of the $500 million.

AMP was the biggest loser in terms of non-KiwiSaver superannuation money. It lost $24.55 million in the June quarter, followed by ANZ Wealth which lost $16.4 million from its superannuation funds.