We have recently run a series of stories (here, here and here) covering the regular saving return analysis to March 31, 2014, it is worthwhile summarising the various tables and highlighting the top performers.
Since the launch of KiwiSaver in late 2007, those who have been signed up from day 1 will have experienced the worst market correction thanks to the Global Financial Crisis (GFC), and then an equity bull market run which commenced around March 2009.
Our tables below show who has delivered the best returns in each risk category. Only funds who were active at the start of our regular savings analysis are ranked here. Funds who started later are in our earlier analysis but are excluded below because a fair benchmarking requires every fund be exposed to the same market conditions.
We set out how we do our regular savings analysis in our earlier article.
Because there is no industry standard about how funds are classified by type, we have grouped Funds in a way we believe is clearer. You can read about how we do that here with the gritty detail here. But be aware there are other methods and in our tables we show how Sorted and Morningstar classify the same funds.
Leaving your KiwiSaver in a Default fund may not be a good idea long-term. If you do leave it there, you really should be clear about why you have done that. There are funds suitable for the range of life stages, so ensure you pick one that suits your own long-term savings goals.
But don't use KiwiSaver as a trading platform; don't jump from Fund to Fund, or just chase the 'best' latest returns. Long-term track records are what is key. You can qualify that with whether returns in the past three years or so are improving your long-term results, or are a drag on them. Our summaries, including those below, reveal that.
Our unique 'regular savings' analysis puts the returns by the Funds into the perspective of how much has been contributed (by you, your employer and the Government). In some Funds, returns are getting close to base contributions. In others, they are quite small compared to your contributions. This shows the possibilities of higher-risk, higher-reward strategies.
But many readers will remember the GFC; higher risk Funds and their members did it tough during that period. However, those that stayed in good Funds gave seen a remarkable recovery, far exceeding the conservative Fund performances.
A few highlights from our analysis are summarised below:
- There is a wide dispersion in returns between the top performers and those at the bottom of the table.
- There is a reasonable dispersion in returns between the top five performers in each category.
- Lower fees does not always translate into better performance. It may be 'true' that over a very wide international range of funds fees and returns are correlated, but you are seeking one or two New Zealand KiwiSaver funds. Fees are secondary to a long-run track record of after-tax-after-fees Returns.
- Actively managed investments have generally outperformed index tracking (that is, passive investment funds) even after fees and tax.
- Socially responsible or ethical funds can add value over the longer term and be top quartile performers. One even popped into our 'top-five' lists below.
Here are the top 5 performers for each category based on our regular savings calculations and analysis. .
|
Conservative Funds (defined) |
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 | (EE, ER, Govt) | $ | % p.a. | $ | % pa |
| to March 2014 | |||||
| Mercer Conservative [D] | 17,885 | 3,647 | 5.70% | 21,532 | 5.14 |
| ASB Conservative [D] | 17,885 | 3,491 | 5.49% | 21,376 | 5.25 |
| ANZ OnePath Conservative [D] | 17,885 | 3,424 | 5.39% | 21,309 | 5.15 |
| Fisher Funds TWO Cash Enhanced [D] | 17,885 | 3,261 | 5.16% | 21,146 | 5.01 |
| AMP Default [D] | 17,885 | 3,166 | 5.02% | 21,051 | 4.88 |
| [D] = Default fund | |||||
| Note: Tower's KiwiSaver has recently been rebranded Fisher Funds Two | |||||
|
Moderate Funds (defined) |
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 | |||
| 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% |
| ------------------- | ||||||||
| 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 (defined) |
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 | |||
| 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% |
| ------------------- | ||||||||
| Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition | ||||||||
| B = Balanced, M = Moderate | ||||||||
|
Growth Funds (defined) |
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. | $ | % p.a. | |||
| Mercer Super Trust ANZ OneAnswer Balanced | G | B | $17,885 | $6,648 | 9.57% | $24,533 | 9.07% | |
| AMP ANZ OnePath Balanced | G | B | G | $17,885 | $6,627 | 9.54% | $24,512 | 9.50% |
| ANZ Balanced Growth | G | G | G | $17,885 | $6,473 | 9.36% | $24,359 | 9.54% |
| Aon Russell LifePoints Growth | G | G | G | $17,885 | $6,468 | 9.35% | $24,354 | 9.35% |
| ANZ OneAnswer Balanced Growth | G | B | B | $17,885 | $6,233 | 9.07% | $24,118 | 9.09% |
| ------------------- | ||||||||
| Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition | ||||||||
| G = Growth, B = Balanced | ||||||||
|
Aggressive Funds (defined) |
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 | |||
| Aon Milford | A | G | AE | 17,885 | 11,965 | 15.17% | 29,850 | 16.96% |
| Milford Active Growth | A | G | AE | 17,885 | 11,933 | 15.14% | 29,818 | 16.92% |
| Mercer SuperTrust TransTasman | A | A | AE | 17,885 | 10,085 | 13.34% | 27,970 | 15.06% |
| ANZ OneAnswer Aust Share | A | A | AE | 17,885 | 10,080 | 13.33% | 27,965 | 14.47% |
| FirstChoice Global Sustainability | A | A | IE | 17,885 | 7,999 | 11.12% | 25,884 | 11.57% |
| Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition | ||||||||
| A = Aggressive, AE = Australian Equities, G = Growth, IE = International Equities | ||||||||
If your KiwiSaver fund does not appear in any of our tables it could be that the data is not publicly available, the fund managers have elected not to provide this to us despite requests for the information or the scheme has closed.
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.
2 Comments
Generally no, but you should check your personal situation.
Almost all KiwiSaver funds are PIEs and they deduct and pay tax on your portion of the fund's earnings at your personal PIR rate. That is a 'final tax' and is excluded from your normal personal income tax calculations.
But best to get an expert opinion related to your personal situation.
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