Market volatility took its toll on KiwiSaver accounts in the final quarter of 2018, investment research company Morningstar said.

Over the December quarter the S&P/NZX 50 Index was down 5.8 per cent, erasing the previous quarter's gain of 4.6 per cent.

"As market volatility returned in the December quarter, returns of KiwiSaver funds generally reflected that underlying market weakness," Morningstar said in its KiwiSaver survey for the quarter.

"This is to be expected from time to time in a long-term investment," it said.

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Kiwisaver returns for the calendar year ranged from 3.60 per cent down to minus 6.77 per cent.

Despite a difficult year for many other equity markets, New Zealand shares delivered a positive return of 4.9 per cent and was one of the best performing developed economy equity markets last year.

Australian shares fell 8.2 per cent over the quarter and 2.8 per cent over the year, Morningstar said.

"The Achilles heel of the Australian market was the large financial sector, which dropped by 14.8 per cent in the wake of highly damaging findings by the Royal Commission," Morningstar said.

"There were patches of positive performance: the defensive consumer staples stocks performed reasonably well as did IT shares, and the miners were also ahead for the year.

"But the dead weight of the struggling financials, plus losses for the industrials and consumer discretionary stocks were the dominant influence," it said.

For New Zealand investors, the losses in Australian dollar terms were compounded by the appreciation of the New Zealand dollar against the Australian dollar.

International equities went through some squalls throughout 2018, particularly at the very start of the year when there had been heightened fears about the outlook for the global economy, but nothing compared with the sharp sell-off that occurred in the final quarter.

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A number of concerns combined to cause near — panic selling, with the main ones the ongoing trade dispute between the U.S. and China, the potential impact of a series of U.S. interest rate increases, the late -cycle outlook for the global economy particularly once the effects of tax cuts wore off in the U.S., and ongoing wariness of emerging markets as an asset class.

While world sharemarkets had generally been reasonably resilient in 2018 after previous selling episodes, the scale of the late-year sell -off was decisive for investor outcomes for the year, it said.

The MSCI World index of developed markets ended 2018 with a 8.7 per cent overall loss.

The kiwi dollar's decline against the U.S. dollar was a mitigant for local investors, but the end result was still a loss of over 3 .0 per cent in New Zealand dollar terms.

Domestically, the S&P/NZX All Real Estate index delivered a quarterly return of almost 2.0 per cent and a calendar year return of 9.8 per cent, which substantially outperformed the wider sharemarket.

The "conservative" KiwiSaver category average recorded 1.3 per cent for the year, followed by moderate (0.4 per cent), balanced ( minus 1.3 per cent), growth (minus 2.1%), and aggressive (minus 4.1 per cent).

Top performers over the quarter against their peer group includes FANZ Lifestages KiwiSaver Income Conservative (up 1.04 per cent), Fisher TWO KiwiSaver Scheme Conservative (negative 1.09 per cent), Aon KiwiSaver Russell Lifepoints 2025 Balanced (negative 3.27 per cent), AMP KiwiSaver Nikko AM Balanced (negative 6.35 per cent) and NZ Defence Force KiwiSaver High Growth (negative 8.17 per cent).

KiwiSaver assets on the Morningstar database grew to more than NZ$50.1 billion at 31 December 2018 from NZ$45.7 billion at 31 December 2017.

ANZ led the market share with more than NZ$12.3 billion. ASB is in second position, with a market share of 18.5 per cent.

Westpac holds third spot ahead of AMP, while Fisher Funds sits in fifth spot.
The six largest KiwiSaver providers account for about 82 per cent of assets on Morningstar's database.