December quarter KiwiSaver returns were positive, investment research firm Morningstar says, with assets continuing to grow. In total, by the end of 2021 they stood at NZ$88.9 billion, up NZ$11.6 billion, or 15%, from NZ$77.3 billion at the end of 2020.
The survey listed top performers over the quarter against their peer group as ANZ Default Conservative 1.5% (Multisector Conservative), MAS Moderate 2.1% (Multisector Moderate), ASB Positive Impact 4.1% (Multisector Balanced), Pathfinder Growth 5.1% (Multisector Growth), and Kiwi Wealth Growth 6.1% (Multisector Aggressive).
ANZ lead the market share with more than NZ$19.2 billion under management, followed by ASB, Westpac, Fisher Funds and Kiwi Wealth respectively.
The successful quarter was buoyed by underlying market resilience, despite the COVID-19 Omicron variant creeping in towards the end, and came after a subdued September quarter.
"World equity markets continue to be optimistic about the global economy despite the arrival of the Omicron variant impacting businesses via worker shortages and increasing supply chain disruptions.
"At the end of the December quarter, international shares made strong gains with a return of 8.6% in the NZ dollar."
"The full year returns were even more impressive with the index returning 28.1% in NZ dollar terms," said Tim Murphy, director of manager selection for the Asia-Pacific at Morningstar.
New Zealand shares did not fare as well as many other equity markets, with an 1.8% drop in the December quarter and a 0.4% annual drop for 2021.
Morningstar attributed this to large losses in A2 Milk and Meridian, which are top 10 NZX stocks.
There were better fortunes across the ditch, with the Australian S&P/ASX 200 Index up 2.1% over the December quarter, and a strong annual rise of 17.2% for 2021.
Late last year, Morningstar criticised the Government's review of KiwiSaver default providers for having a myopic focus on fees, and in this latest survey reiterated that "it is most appropriate to evaluate the performance of a KiwiSaver scheme by studying its long-term return."
To that end, over 10 years the aggressive category average has given investors an annualised return of 11.6%, followed by growth (11.3%), balanced (9.1%), moderate (6.6%), and conservative (5.8%), said the survey.
A note on the Morningstar figures:
- The returns published are after fees but before tax.
- The associated tax credit is taken into consideration when calculating and publishing the returns, rather than month-end unit prices only.
2 Comments
That's up to December 2021 before global equities began selling off in January. A growth at 15% will be wiped by falls of 13%.
Kiwisavers are known to be heavily invested in the US equities and their fall on average to date is already at -5% and it's only February.
With a possibility of US tightening, it seems like we still have a long way to go and I won't be surprise if Kiwisavers suffers a zero return or even negative this year.
'Late last year, Morningstar criticised the Government's review of KiwiSaver default providers for having a myopic focus on fees, and in this latest survey reiterated that "it is most appropriate to evaluate the performance of a KiwiSaver scheme by studying its long-term return.'
Bollocks. Fund returns all revert to the mean over time. The difference in return of a 2% annual fee as opposed to a 0.5% annual fee is significant over time. That's on assets too, not on your returns, i.e your 8% pre-fees return all of a sudden becomes 6% after fees. While you can be certain at any given point about fees, the same doesn't apply to returns.
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