The September quarter saw KiwiSaver funds rebound, with all types of funds producing positive returns as fears of a double-dip recession eased, according to the latest Mercer KiwiSaver survey.
KiwiSaver returns received a boost as global share markets, which took a battering in the June quarter, bounced back.
KiwiSaver growth funds – which have the greatest weighting towards shares – performed best with a median return of 5.8% for the quarter ending September 30, a significant turnaround from the previous quarter’s negative median return of -6.1%.
“Global share markets have bounced back over the past quarter, as fears of the European debt crisis reduced. All asset classes produced positive returns, including property and commodities, which is great for KiwiSaver funds,” said Mercer New Zealand head Martin Lewington.
However, Lewington cautioned that the economic outlook remained uncertain with weak consumer spending and high unemployment in the US.
“The bumpy ride for KiwiSaver investors may not be over yet, but long term investors should not be overly concerned with short term movements. As the contrast between the June and September quarter shows, it is possible to regain monies notionally lost and over the long term the result should be quite positive.”
According to the survey the best performing fund for the September quarter was the Fisher Funds Growth Fund, which returned 10.5% and 31.2% for the year to September 30.
Over the three years KiwiSaver has been running the survey found funds with the highest weighting towards bonds and cash had been the best performers, reflecting the volatile share market conditions over recent years.
Default schemes were the strongest performers over the three year period, recording a median return of 4.6% per annum compared to -3.1% per annum for growth funds.