Regular readers will know that we have been analysing KiwiSaver serturns on the basis of regular savings patterns.
These give importantly different results because the size of your kiwisaver balance grows over time, and therefore it stands to reason that the percentage amount of your returns means more when the balance is larger than when it was smaller.
The key is the dollar return being added to your contrubutions, rather than just the % return the fund claims.
We have previously reported on these returns for Default and Conservative funds here.
We are now reporting on the Balanced and Moderate fund groups.
It is important to benchmark your fund's performance with others that have a similar objective.
But as we have pointed out before, there is no real agreement over how to classify funds.
The Funds themselves describe a risk label. But so does Sorted, and other professional analysts such as Morningstar.
But our view is that none of these are very satisfactory. You can see our opinion here, and the following tables are based on that.
However, for easy reference we have supplied a code that shows how others have classifies them.
We believe long term performance is a key way to assess how a fund performs. But there is always a concern that a fund may be resting of earlier laurels, and long term results don't show recent under-performance.
To keep an eye on that aspect, we are adding an additional metric - the return over the last three years. Any shorter can encourage you to consider switching in a way that is neither healthy for your returns, nor recognising of long-term gains. Don't use your KiwiSaver account as a sharetrader would. It is a long-term commitment. (If you are keen to chase high returns, choose an aggressive fund and leave the research and trading to their experts.)
Here is the comparison as at March 2014 for Moderate Funds.
At the "lower risk" end of the spectrum - that is those funds labeled Defensive, Conservative, or Moderate - you should expect some variability in returns including losses; however these would be expected to be few and far between over the life of your investment.
There are price risks in bonds and other fixed income components of these funds, although funds that are straight Cash have little.
In return for the low risks, you can expect modest returns however.
| Moderate Funds |
Cumulative $ contributions |
+ Cum net gains after tax and fees |
Effective cum return |
= Ending value in your account |
Effective last 3 yr return |
|||
| since April 2008 | X | Y | Z | |||||
| to March 2014 | (EE, ER, Govt) | $ | % p.a. | $ | % pa | |||
| BNZ Moderate | M | B | 3,113 | 172 | 8.30% | 3,285 | n.a. | |
| ANZ Conservative Balanced | M | B | M | 17,885 | 4,673 | 7.10% | 22,559 | 7.10% |
| Aon Russell LifePoints 2015 | M | C | M | 17,885 | 4,632 | 7.00% | 22,517 | 6.30% |
| Aon Russell LifePoints Cons | M | C | C | 17,885 | 4,424 | 6.80% | 22,309 | 6.10% |
| ANZ OneAnswer Conserv Bal | M | B | M | 17,885 | 4,409 | 6.70% | 22,294 | 6.60% |
| FirstChoice Active Conservative | M | C | M | 17,885 | 4,387 | 6.70% | 22,272 | 6.60% |
| AMP Moderate | M | B | M | 17,885 | 4,113 | 6.30% | 21,998 | 6.30% |
| ANZ OnePath Conserv Bal | M | B | M | 17,885 | 4,087 | 6.30% | 21,972 | 6.20% |
| Fisher Funds Conservative | M | C | C | 14,677 | 2,655 | 6.20% | 17,332 | 6.10% |
| Fisher Funds TWO Conservative | M | C | M | 17,885 | 3,831 | 6.00% | 21,716 | 5.60% |
| Fidelity Conservative | M | C | M | 17,885 | 3,765 | 5.90% | 21,650 | 5.50% |
| Smartshares Conservative | M | C | C | 17,885 | 3,713 | 5.80% | 21,598 | 6.10% |
| AMP Conservative | M | C | M | 17,885 | 3,707 | 5.80% | 21,592 | 5.50% |
| ANZ Conservative | M | C | C | 17,885 | 3,668 | 5.70% | 21,553 | 5.60% |
| FirstChoice Conservative | M | C | C | 17,885 | 3,529 | 5.50% | 21,414 | 5.30% |
| ANZ OneAnswer Conservative | M | C | C | 17,885 | 3,412 | 5.40% | 21,297 | 5.10% |
| Mercer SuperTrust Conservative | M | C | M | 17,885 | 3,225 | 5.10% | 21,110 | 4.30% |
| Craigs Conservative | M | C | 17,885 | 3,017 | 4.80% | 20,902 | 4.40% | |
| Westpac Conservative | M | C | M | 17,885 | 2,730 | 4.40% | 20,616 | 4.60% |
| Grosvenor Conservative | M | C | M | 11,928 | 1,133 | 3.40% | 13,062 | 3.00% |
| ------------------- | ||||||||
| Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition | ||||||||
| B = Balanced, C = Conservative, G = Growth, M = Moderate | ||||||||
Balanced Funds
For Balanced or Balanced Growth type funds there is more volatility in returns as they traditionally have higher exposures to equities or property.
Sometimes, some types of bond funds deserve a higher risk assessment too.
Although the losses in capital may be experienced more frequently, over the long run your capital value should grow more quickly than the more conservative funds.
Here are these comparative results:
| Balanced Funds |
Cumulative $ contributions |
+ Cum net gains after tax and fees |
Effective cum return |
= Ending value in your account |
Effective last 3 yr return |
|||
| since April 2008 | X | Y | Z | |||||
| to March 2014 | (EE, ER, Govt) | $ | % p.a. | $ | % pa | |||
| Milford Balanced | B | B | B | 11,928 | 3,533 | 11.50% | 15,462 | 11.00% |
| BNZ Balanced | B | B | 3,113 | 212 | 10.20% | 3,325 | n.a. | |
| ANZ Balanced | B | B | B | 17,885 | 5,569 | 8.20% | 23,454 | 8.40% |
| Aon Russell LifePoints 2025 | B | B | B | 17,885 | 5,361 | 8.00% | 23,246 | 7.60% |
| ANZ OneAnswer Balanced | B | B | B | 17,885 | 5,309 | 7.90% | 23,194 | 7.80% |
| AMP Tower Balanced | B | B | B | 17,885 | 5,237 | 7.80% | 23,122 | 7.90% |
| Aon Russell LifePoints Mod | B | B | M | 17,885 | 5,184 | 7.80% | 23,070 | 7.30% |
| AMP Tyndall Balanced | B | G | G | 17,885 | 4,974 | 7.50% | 22,859 | 7.30% |
| Fisher Funds TWO Balanced | B | B | B | 17,885 | 4,910 | 7.40% | 22,795 | 7.30% |
| Fidelity Ethical | B | B | B | 17,885 | 4,868 | 7.40% | 22,753 | 7.80% |
| ANZ OnePath Balanced | B | B | B | 17,885 | 4,729 | 7.20% | 22,615 | 7.10% |
| Aon Tyndall Balanced | B | G | G | 17,885 | 4,596 | 7.00% | 22,481 | 6.80% |
| FirstChoice Moderate | B | B | M | 17,885 | 4,458 | 6.80% | 22,343 | 6.60% |
| AMP Moderate Balanced | B | B | B | 17,885 | 4,437 | 6.80% | 22,322 | 6.90% |
| ASB Moderate | B | B | M | 17,885 | 4,431 | 6.80% | 22,316 | 6.50% |
| Mercer SuperTrust Mod | B | B | B | 17,885 | 4,330 | 6.60% | 22,215 | 5.80% |
| Fidelity Balanced | B | B | B | 17,885 | 4,100 | 6.30% | 21,985 | 5.90% |
| Grosvenor Balanced | B | B | B | 17,885 | 3,207 | 5.10% | 21,092 | 4.40% |
| ------------------- | ||||||||
| Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition | ||||||||
| B = Balanced, C = Conservative, G = Growth, M = Moderate | ||||||||
The right fund type for you will depend on your tolerance for risk and importantly on you life stage. You should move only with appropriate advice and for a substantial reason.
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