OnePath and ASB remain the dominant players in the KiwiSaver market, with 45.40% of KiwiSaver assets between them, according to the Morningstar KiwiSaver Performance Survey for the June quarter.
Morningstar’s co-head of fund research, Chris Douglas, said that while KiwiSaver results for the second quarter were mixed, largely due to the high Kiwi dollar creating a headwind for offshore investments, “it’s pleasing to see that many KiwiSaver funds are continuing to perform admirably over longer timeframes, especially when looking at performance from an investor’s standpoint.”
The survey also found that OnePath (mapping to SIL, ANZ and National Bank KiwiSaver options), Mercer and Westpac were the best performing multi-sector KiwiSaver options over the June quarter.
Looking at one and two year figures, a better indication of a fund managers performance, the survey found the Fisher Funds Growth KiwiSaver was the best performing multi-sector fund, “streaks ahead of peers over the past three years,” according to Douglas.
Aon held the second and third place spots with the Aon KiwiSaver Russell and Aon KiwiSaver OnePath.
Within the single sector options, listed property funds’ one-year returns have benefitted from the strong performance of the Kiwi and global listed property markets over the second quarter.
New Zealand property returned 22.08% and global property 44.16% over the past year, and the strongest performances were produced by the SIL KiwiSaver International Property and SIL Kiwisaver Australasian Property.
Morningstar also used time-weighted calculations to take account of the fact most KiwiSavers add to their funds incrementally, finding “KiwiSaver truly has been a great experience for the majority of investors.”
“When looking out over three years, investors in the more growth-orientated funds have experienced very strong results, despite the highly volatile market conditions,” Douglas said.
Morningstar also found KiwiSaver assets on their database had grown from $954.1 million in June 30, 2008 to $8.53 billion by June 30, 2011, “a phenomenal growth rate.”
The acquisition of Huljich funds helped Fisher Funds almost double its KiwiSaver assets, though OnePath and ASB remain the dominant players.
The survey also questioned ASB’s April 1 decision to increase the fees for a number of its KiwiSaver options.
The second largest KiwiSaver provider, with more than 20% market share and $1.78 billion in KiwiSaver funds, claimed the change was aimed at simplifying its fee structure and meeting increased technology and communication costs.
Douglas said the size and scale of ASB, the largely passive (ie low cost) nature of its investments and its economies of scale from predicted growth should be keeping its costs down.
“Given the tremendous success of KiwiSaver and the amount of money ASB manages, this was a surprise move,” Douglas said.
“While we applaud a more transparent approach, the increase in fees made no sense to us.”