Fisher Funds, Westpac top Morningstar table for default KiwiSaver returns in Q3

People in Tehran after Iran's missile attack on Israel early last month. Geopolitical tensions are among the factors influencing KiwiSaver returns. Photo / Arash Khamooshi, The New York Times

All multi-sector KiwiSaver funds produced positive returns over the September quarter, with Fisher Funds and Westpac topping the table for best returns among the default providers, research group Morningstar said.

Most of the default funds punched out 16%-plus returns for the year, Morningstar said.

This was in contrast to the average conservative fund which was around 11%.

The average multi-sector category returns for the quarter clustered around 4%, indicating broad-based asset class appreciation.

Quay Street continued to perform well across many time periods in the conservative and balanced categories, it said.

Milford had consistently high performance within the moderate, balanced and growth categories over the long term.

“Generate is putting up strong numbers across many time periods,” Morningstar said.

Morningstar said it was “most appropriate” to evaluate performance of a KiwiSaver scheme by studying its long-term returns.

Over 10 years, the aggressive category average has given investors an annualised return of 9.1%, followed by growth (8.2%), balanced (6.7%), moderate (4.8%), and conservative (4.3%).

KiwiSaver assets on the Morningstar database increased during the September quarter to $117.6 billion from $110.8b in the June quarter and $96b in the September 2023 quarter.

ANZ led the market share with more than $21.8b in KiwiSaver funds under management.

ASB stole back second place this quarter with Fisher funds dropping to third. Westpac is in fourth with Milford rounding up the top five.

The five largest KiwiSaver providers accounted for about 68% of assets in the Morningstar database and generated around 69% of the fees.

Morningstar said the September 2024 quarter presented a mixed performance across various asset classes in New Zealand.

While some asset classes benefited from easing inflationary pressures and more accommodating monetary policy, others faced headwinds from global economic uncertainties and domestic factors.

The benchmark NZX50 sharemarket index delivered modest returns for the quarter.

“While the index benefited from a recovery in certain sectors, such as technology and consumer discretionary, concerns about global economic growth and rising interest rates weighed on sentiment.

“Global equity markets experienced mixed performance, with developed markets generally outperforming emerging markets,” Morningstar added.

“Factors such as corporate earnings, geopolitical tensions, and central bank policies influenced returns.”

New Zealand government bonds posted positive returns as the Reserve Bank continued its rate-cutting cycle.

Lower yields and increased demand from investors contributed to price appreciation, it said.

Corporate bonds also benefited from the lower interest rate environment.

However, credit spreads widened slightly due to concerns about potential defaults and economic slowdown, Morningstar said.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.