KiwiSaver

Growth KiwiSaver funds performed strongly again in the June quarter, Morningstar’s latest research shows.

The research house has released its latest KiwiSaver survey.

“We continue to have an equity-friendly market environment with local and global equity markets posting solid returns this quarter. Fixed income assets also had reasonable performance,” Morningstar director of manager research ratings, Asia Pacific, Chris Douglas said.

“As a result, KiwiSaver funds with a bias to growth assets, posted the strongest returns, but there was a closer dispersion of returns across the risk profiles than previous quarters.”

The local share market performed slightly better in the second quarter of the year than in the first, he said. The S&P/NZ 50 Index was up 5.8% in total returns over the quarter and 10.6% over the year.

Global equities were the best-performing asset class.

Morningstar said top performing funds in the quarter compared to their peer group included Milford KiwiSaver Conservative Fund 1.73% (Multisector Conservative), AMP KiwiSaver Nikko AM Conservative 2.14% (Multisector Moderate), Westpac KiwiSaver-Balanced Fund 2.59% (Multisector Balanced), Westpac KiwiSaver-Growth Fund 3.06% (Multisector Growth), and Generate KiwiSaver Focused Growth Fund 3.72% (Multisector Aggressive).

Over five years, Milford’s Active Growth fund was the best performer.

KiwiSaver assets on the Morningstar database hit $40.5 billion at June 30. ANZ continues to have the biggest market share.

Performance fees have helped to lift the fee revenue claimed by fund managers Milford and Fisher Funds.

Companies Office figures show Milford reported fee revenue of $46.5 million for the year to March.

That is up 21% on the previous year.

Of that, $35.1m was management fees and $11.4m performance fees.

Milford has near $4 billion in retail funds, with more than $800m in its KiwiSaver funds. 

For the same period, Fisher had fee revenue of $69.1m, up 3%.

That was made up of $60.8m in management fees and $3.3m in performance fees, which was a drop compared to the year before.

Carmel and Hugh Fisher, founders of Fisher Funds, were named on this year’s NBR Rich List, with wealth of $55 million.

Fisher Funds is now the country’s fifth-largest fund manager, with more than 255,000 clients and $7 billion under management.

Fisher stepped down from her role as managing director last year.

KiwiSaver firm Booster has made a direct investment of capital into a wine company.

The investment in Awatere River Wine Company is the first injection of KiwiSaver funds into the wine industry.

Awatere River Wine Company founder and winemaker Louis Vavasour said it was a vote of confidence in the buoyant New Zealand wine industry.

The Vavasour family retains principle ownership of Awatere River Wine Company with the Booster Tahi Limited Partnership (Booster’s investment vehicle for its KiwiSaver funds) taking a significant minority stake. The Booster Tahi Limited Partnership will own 100% of Waimea Estates with Vavasour the chief executive of the overarching venture.

The Booster Tahi Limited Partnership was established to help Kiwis grow their businesses and manage their wealth. 

The Booster investment also includes the purchase of additional vineyards in Marlborough and Nelson which will contribute to future company growth and return for investors.

ANZ is launching a new system through which it hopes to hold on to more of its KiwiSaver members.

Ana-Marie Lockyer. ANZ’s general manager of wealth, said the bank was planning to send letters to rwho have signalled their intention to transfer out of its OneAnswer KiwiSaver Scheme.

She said the bank would still process the request within the agreed timeframes – the bank will process all requests within 10 business days of receipt.

“The FMA has previously expressed concern about the amount of switching going on between KiwiSaver schemes and we want to ensure customers are switching for the right reasons,” she said.

“We want to take the opportunity to remind customers of what our scheme has delivered and the benefits of staying with OAKS and ANZ Investments and include a form they can complete if they want to remain in our scheme.

“If the customer has an adviser, the adviser will also receive a notification of the transfer. Some customers may switch schemes without consultation with their adviser, so this gives the adviser the opportunity to get in touch.

“The final letters that will commence being sent next week will also encourage customers to talk to their adviser about this knowing the value they add to the relationship.”

The letter sent to clients will also include a product disclosure statement and an application form for them to complete and return if they wanted to remain with the scheme.

To ensure you have a chance to retain your clients, you are currently receiving a notification from us when your client chooses to transfer their OneAnswer KiwiSaver account to another scheme.

The initiative goes live on July 17.

It is the only one of the big banks employing such a method.

ASB, BNZ, ANZ and Westpac said they did not have any systems to retain KiwiSaver members.

ASB general manager wealth Jonathan Beale said: “As a default provider, we have responsibilities to act on a member’s request within a prompt fashion. This is currently to process any transfer within 10 working days of the new provider confirming acceptance of the transfer. Although this service agreement is limited to default members, we extend this level of service to all ASB KiwiSaver Scheme members,” he said.

“ASB is proud of the service we offer our KiwiSaver Scheme members and we continuously look for ways to improve. We currently have various initiatives underway to increase member engagement with their KiwiSaver account and better assist the individual’s goals.”