A KiwiSaver expert reveals how much you should be investing if you want to beat inflation and live a somewhat wealthy retirement. Video / NZ Herald
Default KiwiSaver funds are making better returns this year but the average return across all fund categories failed to outpace inflation in the June quarter.
Morningstar’s latest report on KiwiSaver showed the average category returns varied from 1.2 per cent for conservative to 5.5 per cent for aggressive in thethree months to the end of June.
Default funds averaged 3.4 per cent in the quarter. Inflation was 6 per cent in the period.
However, in the 12 months to June they were performing better, with an average 8.7 per cent default fund return and between 4.3 per cent for conservative to 13.1 per cent for aggressive options.
The new default fund managers appointed in 2021 had improved returns, with Simplicity, Booster and BNZ’s default funds all returning more than 9 per cent in the year to the end of June.
KiwiSaver assets totalled $97.5 billion in the three months to the end of June, with $779 million in fees collected. Photo / 123RF
The slice of the pie totalled $97.5 billion, with the majority of it shared between the six largest fund managers. In order they are ANZ, ASB, BT Funds Management, Fisher Funds, Kiwi Wealth (now owned by Fisher Funds) and Milford Asset Management.
The total fees earned between all 23 managers in the three month period was $779 million.
More than half of all assets were held in local and international shares, while about 43 per cent of all assets were held in cash and bonds.
Aggressive and growth funds were made up of more international, growth assets like offshore equities, compared with conservative and moderate funds holding at least half of their wealth in New Zealand-domiciled assets.
Over 10 years, aggressive returns remained the strongest, with an annualised return of 8.7 per cent, compared with 8.3 per cent for growth funds, 6.6 per cent for balanced, 4.6 per cent for moderate and 4.2 per cent for conservative funds.
The leaders’ league
The quarterly winners on the aggressive end included Generate’s Focused Growth Fund, returning 7.7 per cent in the period, QuayStreet’s growth fund with 6.4 per cent, and its balanced socially responsible investment fund returned 4.8 per cent.
On the more conservative end, Kiwi Wealth’s default conservative fund returned 2.1 per cent, while Generate’s moderate fund returned 2.7 per cent.
The best performing fund was SuperLife’s US Large Growth fund with 17.9 per cent returned, while the worst was Kernel’s S&P Global Clean Energy fund with a negative 4.4 per cent return.
Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
