The latest data released for KiwiSaver performance as at September 30, 2012 is from Milford Asset Management.
Milford Asset Management (Milford) is a boutique funds management business formed in 2003 by a group of high-profile professionals.
Anthony Quirk and Brian Gaynor are the 'public faces' of Milford. Both have extensive financial market experience and are highly respected in the funds management market.
Milford is one of the smaller KiwiSaver providers with approximately $76 mln under management, although the funds have grown rapidly over the past two years as members have become aware of the manager's performance.
Milford currently offers members three KiwiSaver funds - Active Growth, Balanced and Conservative*. The Conservative Fund started on 1 October and is therefore not included in our commentary or return table below.
Milford's investment mandate is flexible and allows the manager to protect shareholder capital by holding cash and bonds when either market conditions dictate this is necessary or there are insufficient new opportunities available.
The September returns reveal that Milford's Active Growth Fund's five year return of +12% per annum is head and shoulders above not only their main sector peers but the entire KiwiSaver market as a whole.
As an aboslute return manager the schemes have a target return and are managed by regularly rebalancing the underlying asset mix, which in the case of the Active Growth Fund consists of primarily Australian and New Zealand shares, Cash and Bonds, to achieve the desired return. The manager may also invest a small portion of the funds in global securities. Milford also has the ability to use Cash and Bonds to not only dampen volatility but also protect the capital value of members' funds.
Many managers have either fixed or target asset allocations which must be maintained and this can inhibit their ability to hold Cash in times when markets are depressed or there are no suitable investment opportuinities available.
Milford's more 'conservative' Balanced fund has also been a top performer in its peer group, although does not have a three or five year track record yet.
Over the past 12 month's the Milford Balanced Fund has returned +16.3% p.a. versus an average peer group return of +11.6% per annum according to Morningstar's latest performance ranking report.
Over the past 12-months the Active Growth Fund is the top performer in the Australasian shares sector of KiwiSaver with a return of +22.9% per annum. The only scheme to beat the Active Growth Fund over the past 12 month's was SIL's Interrnational Property Fund (+28.53% p.a.).
Milford's long term performance shows their research skill in the New Zealand and Australia sharemarkets.
However, in terms of investments in global securities, they engage international fund managers to execute their strategy.
Below is a table of the longer term performance of the two funds. The return data is before tax and after fees and is as published by the managers. (No adjustments have been made to take into account those additional fees which scheme providers may charge and which are not included in calculating the fund performance. We do make such adjustments, but they will not be included until the full benchmarking is published.)
|
Milford KiwiSaver Scheme |
1 year (p.a.) |
5 year (p.a.) |
Since inception (p.a.) |
| Balanced Fund | 15.5% | 6.8% | |
| Active Growth Fund | 21.9% | 12.0% | 11.3% |
More detailed performance reporting can be found here ».
* Story updated to include the Conservative Fund which commenced on 1 October 2012.
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