Milford chief executive Troy Swann is stepping down at the end of the year having steered the fund manager through industry-wide regulatory change.

He announced his decision in a letter to clients saying he was returning home to Australia to be closer to his family.

Milford head of product and operations Mark Ryland has been appointed as acting CEO while Milford undertakes a process to appoint a new chief.

Swann took the reins in October 2016, replacing Anthony Quirk who retired as an executive in July. Swann was previously with NAB Asset management in Sydney.

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He joined Milford as the firm came to grips with new licensing requirements of the Financial Markets Conduct Act (FMC) and changes to a suite of other regulations including anti-money laundering and fair trading rules.

The firm was also recovering from a $1.5 million settlement with the Financial Markets Authority following a market manipulation probe related to former portfolio manager Mark Warminger.

Since then Milford's funds have continued to perform well, leading the pack on KiwiSaver investment returns in particular. The firm now has over $6 billion in funds under management.

Reporting entity Milford Funds Limited reported a net profit of $8.02m for the year to March 31, 2018 – up from $6.96m the previous year.

Fee income was $61.14m compared to $45.54m in 2017.

The directors declared total dividends of $10m during the year.

"I have thoroughly enjoyed my time at Milford and am very proud to have been a part of what Milford has delivered to our clients over that period," Swann said.

He said Milford's active funds have been reducing holdings of shares and corporate bonds in favour of cash due to recent volatility.

It has also increased holdings of defensive securities, which include companies with more reliable earnings, healthy balance sheets and stable cashflows.

"The increased level of volatility since October is a reminder that successful investing is a long-term activity."