The amount of money managed by KiwiSaver providers has bounced up to a new high after a strong recovery in sharemarkets.
Total funds under management hit $66.5 billion as of June 30, up $7.4b from the March quarter figure of $59.1 billion, according to Morningstar.
The March quarter saw a record $4.5 billion wiped off total funds under management after sharemarkets plummeted around the world amid news of the spreading coronavirus pandemic.
Tim Murphy, director of manager research Asia-Pacific for Morningstar, said the June quarter saw markets improve from the lows of March boosting KiwiSaver funds.
"The June quarter returns of KiwiSaver funds generally reflected the improved underlying market conditions."
Murphy said the benchmark New Zealand index - the S&P/NZX50 - rose 16.9 per cent over the quarter which meant the index was now only 0.4 per cent down from the start of the year - and was one of the best-performing sharemarkets globally.
But the recovery has been centred around a small number of companies, with A2 Milk and Fisher & Paykel Healthcare largely attributed to the index rise.
In Australia, the S&P/ASX200 is up 16.5 per cent over the June quarter but is still down 10.4 per cent over the half year.
International shares have also recovered but the MSCI World Index is still down 5.8 per cent in US dollars, although New Zealand investors were mainly sheltered from this by the fall in the kiwi against the greenback.
Murphy said funds with a large exposure to US growth stocks, A2 Milk or Fisher & Paykel Healthcare performed particularly well, but over the quarter no funds were in the red.
Over the year to June 30, 21 funds out of 196 had negative returns but these were largely funds with very concentrated portfolios. Most KiwiSaver funds had a spread of different asset classes.
Murphy said the bounce-back served as reminder as to why it was important not to focus on short-term performance.
"If you panicked and switched funds you have cost yourself a lot of money," he said.
It's estimated around $4.5 billion worth of investments was switched by people moving from growth to conservative funds during the March quarter which saw them crystallise losses and miss out on the market bounce-back.
The average returns for the quarter ranged from 4.6 per cent for the conservative category to 13.1 per cent for the aggressive category.
Over the quarter, Kiwi Wealth's conservative fund topped the conservative category with a 7 per cent return, while the SuperLife Growth fund topped the balanced category with 11.6 per cent and the AMP KiwiSaver Nikko AM Growth fund was the best-performing growth fund up 14.8 per cent.
Murphy said investors were better to base their decisions off long-term performance.
Over 10 years, the growth category has had an average annual return of 9.6 per cent, while funds in the balanced category were up 8.1 per cent on average per annum and conservative funds rose 6 per cent on average per annum.