The latest data released for KiwiSaver performance as at March 31, 2013 is from Milford Asset Management. Our previous story covering the December 31, 2012 returns can be found here.
Recent results show Milford's flagship Active Growth Fund continues to deliver returns to investors well in-excess of the 10% benchmark set by the manager.
At the end of March, the Active Growth Fund held 21.8% in Cash, which meant the fund under-performed the NZX 50 Gross Index for the month by approximately 0.9%, but was still ahead of its monthly benchmark.
One of the interesting additions to the portfolio has been the stake in Straker Translations, a translation service for worldwide customers on the cloud. Translation, believe it or not, is a $40 billion per annum industry.
Milford will also have representation on the board and intends to lift its stake in Straker should the company meet pre-arranged performance targets.
The manager also has holdings in other unlisted equities such as Orion Corporation, Kauri Property Fund and Manuka Health.
As reported earlier, under the new KiwiSaver Periodic Disclosure Regime, managers from July will need to provide a liquidity ratio as part of their regular disclosure statements.
The liquidity ratio measures the proportion of the total investment portfolio which can be liquidated within five days under normal circumstances. It will be interesting to see how the manager treats the unlisted securities in terms of the liquidity ratio. We do not expect many investors will be concerned with the lack of liquidity of a small segment of the Milford portfolio.
The Balanced Fund has not been going as long as the Active Growth Fund but is still providing stellar performance. Since April 2010 the Balanced Fund has returned 9.4% per annum or over double what an investor could have got on an equivalent bank term deposit. The fund comprises approximately a 50/50 mix of growth and income assets.
The Balanced Fund also invests into other Milford Funds with only 25.6% of investors' funds finding their way into 'non-Milford' investments (Cash 4.1% and International Share investments 21.5%).
We don't have an issue with fund managers investing into their own funds on the proviso it is the most efficient and cost effective way to gain access to various markets for the investors, and it is disclosed of course.
The Balanced Fund's currency exposure is actively managed and as at March 31 the fund was 50% hedged against the US$ and 70% hedged against the Euro. The manager also took advantage of recent currency market volatility to trade the NZ dollar. The profits from this activity added to the underlying performance of the fund.
Since its inception in October 2012, Milford's Conservative portfolio has produced a return of 8.6% which is over 7% ahead of the 90-day Bank Bill Index which is the funds underlying benchmark.
Below is a table of the performance of the three Milford funds. The return data is before tax and after fees and is as published by the manager. (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.) |
| Conservative Fund | n/a | n/a | 8.6% |
| Balanced Fund | 19.2% | n/a | 9.4% |
| Active Growth Fund | 25.5% | 12.9% | 12.6% |
More detailed performance reporting can be found here ».
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