KiwiSaver funds under management reached $110.8 billion in June quarter, according to new Morningstar report, with ANZ continuing to hold onto biggest slice of the market

KiwiSaver funds under management reached $110.8 billion in the three months to June, despite the period of “cautious navigation” that hung over the quarter for New Zealand investors.

Morningstar data director Greg Bunkall said KiwiSaver assets rose by $3.5 billion in the June 2024 quarter.

This was $1.1 billion less than during the March quarter when KiwiSaver funds rose by $4.6 billion. Overall, KiwiSaver funds jumped from $108.6 billion in March to 110.8 billion in June.

Of the top three biggest providers, ANZ still has the biggest slice of the market share pie with 18.7%, or $20.7 billion.

Fisher Funds and ASB came in next with a market share of 15.1% or $16.7 billion each although Bunkall said Fisher Funds claimed the second biggest provider spot this quarter. 

In 2023, ASB held the second largest market share until September last year when it lost that spot to Fisher Funds.

The five biggest KiwiSaver providers hold about 68% of the assets in Morningstar’s database and account for roughly 69% of the fees.

Bunkall said multisector KiwiSaver funds had yielded a mix of positive and negative returns throughout the June quarter, and funds containing risk assets had struggled the most.

The average multisector category returns ranged between 0.3% to 0.8% which Bunkall said indicated “incremental gains” for most funds.

On a multisector funds performance level, BNZ First Home Buyer Fund was the best performing fund in the conservative category in the June quarter, up 1.1%.

In the moderate category, Pie Conservative was up the most at 1.1%, while Pathfinder Balanced Fund was the best performer in the balanced category, up 1.9%.

In the growth category, Pathfinder Growth Fund had the best performance and was up 2.1% across the quarter.

Kernel High Growth rose 1.9% and was the top performing fund in the aggressive category.

Across a 10-years benchmark, Morningstar’s preferred long-term performance measurement, Bunkall said the aggressive category average has given investors an annualized return of 9.1%.

Next in line came the growth category, giving an average return of 8.2%, followed by the balanced category at 6.7%, the moderate category at 4.7%, and the conservative category at 4.3%.

Out of the six default fund options, five funds returned 10% and above in the 12 months to June apart from Fisher Funds, which delivered an 8.3% return in that period.

Morningstar reported an estimated $869 million in annual fees in the year to the June quarter, which is up from the $849 million in annual fees in the March quarter and $818 million in December.

Cautious navigation

Bunkall said the Reserve Bank (RBNZ) had maintained its cautious stance in the second quarter and kept interest rates steady at 5.50%.

“This decision reflected a balancing act between controlling inflation, which showed signs of moderating, and supporting economic growth, which remained tepid,” he said.

“Globally, economic performance was uneven. The US economy continued its robust expansion with a GDP growth rate of 2.6% for the quarter, driven by resilient consumer spending and a strong labor market. The Eurozone, however, faced headwinds with a modest growth rate of 0.7%, as manufacturing activity slowed and geopolitical tensions weighed on sentiment. In Asia, China’s economy grew by 4.8%, rebounding from previous quarters but facing challenges from a property market slowdown and regulatory changes.”

Bunkal described the June quarter as a period of “cautious navigation” for NZ investors and said domestic challenges still persisted despite global growth dynamics offering “some positive signals”. 

“The equity market delivered moderate gains, primarily supported by international exposures, while fixed income provided some stability amidst fluctuating yields,’ he said.

“The weakening NZ dollar underscored the importance of currency diversification in investment portfolios. Looking ahead, investors will need to remain vigilant, balancing opportunities in global markets with the evolving economic landscape at home.”