By Amanda Morrall
A recovery in the equities market has helped put growth and aggressive funds at the top of the performance charts for annual returns since inception.
According to interest.co.nz's three year performance data ending March, 31, 2012, some of the best performing growth funds have deliverered double digit annual returns. Even so, some of the more conservative (least risky) funds in KiwiSaver have been returned a respectable 7% per annum over the same period after taking into account tax and fees.
Default funds have mostly kept pace with the best performing conservative funds delivering average returns around the 6% mark per annum.
Interest.co.nz senior analyst Craig Simpson said the spread among the best performers and worst performers within a peer group was prominent, in some cases as much as 10%.
"It wasn't so much in cash funds, it (the divergence) really came to light in the aggressive funds where you've have a higher exposure to stock markets and other instruments.''
For example, Fisher Funds growth fund has delivered more than 15% per annum over three years to March 31, 2012 making it the top ranking aggressive fund. That compares to Gareth Morgan's Growth fund which came 20th among its peer with average returns below 2% in that same period of time.
Across the different category of funds, Aon Russell was a stand out. Its funds took top spots in four different fund categories when it came to three year annual returns.
Mercer and OnePath also featured across multiple category of funds.
With this year's winner having the potential to become next year's loser, Simpson said consistency in performance was a more meaningful gauge of how a fund was tracking.
He also emphasised the long-term impact of fees. Here too there were some interesting findings. In some cases, high fees were justified by high performance but in some instances high fees were accompanied with relatively poor performance as well. Similarly some funds with low fees were also delivering sub-standard returns.
Another observation from the data was that providers were the highest volume of funds under management were not necessarily the best performers. Some of the boutique funds and non-default providers stood out as having exceptionally strong and consistent returns.
When it comes to evaluating your KiwiSaver investors shouldn't get hung up on one single aspect. Fees, performance, consistency of performance, reputation of the fund manager, quality of communication, and risk tolerance are among some of the key considerations.
As a general guide, Simspon suggests those funds consistently appearing in the top quartile show evidence of strength.
To see a break down of asset allocation for a particular fund, find your fund and follow the links.
For a complete listing of performance rankings by peer group click here.
Note: SuperLife is not included in the ranking as data was not available at time of publication.
| Default funds | Rank | 3 years performance |
| Mercer Conservative | 1 | 7.3% |
| AXA Income Plus | 2 | 7.2% |
| OnePath Conservative | 3 | 7.1% |
| Tower Cash Enhanced | 4 | 6.3% |
| AMP Default | 5 | 5.0% |
| ASB Conservative | 6 | 4.4% |
| Aggressive | Rank | 3 year performance |
| Fisher Funds Growth | 1 | 15.6% |
| Aon Russell Lifepoints 2045 | 2 | 14.8% |
| OnePath SIL Growth | 3 | 12.9% |
| Gareth Morgan Growth* | 20 | 2.8% |
| Growth | Rank | Performance |
| Aon Russell Lifepoints Growth | 1 | 14.2% |
| Aon Russell Lifepoints 2035 | 2 | 14.9% |
| Aon Russell Lifepoints Balance | 3 | 13.6% |
| Forsyth Bar Growth | 28 | 4.3% |
| Balanced | Rank | Performance |
| Aon Russell Lifepoints 2025 | 1 | 13.3% |
| Aon Russell Lifepoints Moderate | 2 | 12.5% |
| OnePath SIL balanced | 3 | 10.2% |
| Forsyth Barr Balanced | 17 | 4.1% |
| Moderate | Rank | Performance |
| Aon Russell Lifepoints 2015 | 1 | 12.3% |
| Aon Russell Lifepoints Conservative | 2 | 11.3% |
| National Bank Conservative Balanced | 3 | 8.5% |
| Craigs Conservative | 20 | 4.1% |
| Conservative | Rank | Performance |
| Westpac Capital Protection Plan No.1 | 1 | 10.2% |
| Mercer Conservative | 2 | 7.3% |
| OnePath Conservative | 3 | 7.2% |
| Tower Preservation | 11 | 2.0% |
For a complete listing of performance rankings across all peer groups click here.
*NOTE: This figure has been corrected from the original story which showed a published return of 1.9%. The ranking remains unchanged.
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