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Equities boost KiwiSaver growth funds

Continued strong sharemarket performance has boosted KiwiSaver growth funds, which have been the best performers for the quarter ended September 30, according to Mercer’s KiwiSaver Survey.

Thursday, November 15th 2012, 6:53AM

by Niko Kloeten

Growth funds recorded a median return of 5.7% for the period, while KiwiSaver default funds produced the lowest results, with a median return of 2.7%. Conservative funds saw a median gain of 3.4% and balanced funds 4.6%. 

The best performing fund for the quarter was growth fund Aon Russell Lifepoints, which returned 8.5% for the quarter.  

In the 12 months to September 30, the median fund return for growth funds was 13.8%, with the best performing fund OnePath SIL Growth, returning 17.0% over the past 12 months.

The median manager (across all fund types) returned 4.8% over the quarter and 11.6% over the last 12 months (after fees but before tax). 

Philip Houghton-Brown, head of investments, Mercer New Zealand said recent fund performance is encouraging for KiwiSaver members.

“Following improved market conditions in previous months, shares were the main benefactor with growth funds faring best over the quarter,” he said.

“Despite the market unrest over the past year, growth funds continue to perform the best during this period however, they are still behind the other three multi-sector options when compared over the five years since KiwiSaver’s inception.”

Houghton-Brown said internationally the big unknown is how the US will deal with the looming “fiscal cliff”. 

“New Zealand saw a spike in the unemployment rate however, there are positive signs for local investors with additional stimulus from the rebuild of Canterbury and room to move with the official cash rate staying steady at 2.5%,” he said.

Mercer’s quarterly data shows markets united in the September quarter as announcements surrounding quantitative easing in Europe, USA and China spurred markets on to heights not reached since the Global Financial Crisis. 

“The positive returns seen in recent months for growth funds reflect a steady increase in overall market sentiment,” Houghton-Brown said.

“New Zealand shares were up 13.4% over the quarter, benefitting from the improved macroeconomic outlook, as well as a better than expected domestic earnings season.”

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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AMP Home Loans $200k+ 6.39 5.59 5.99 6.30
AMP Home Loans LVR <80% - - 5.99 -
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ANZ Special - - 5.95 -
ASB Bank 6.00 5.85 6.49 6.85
ASB Bank Special - - - -
BankDirect 6.00 5.85 6.49 6.85
BankDirect Special - - - -
BNZ - Classic - - 5.95 -
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BNZ - Mortgage One 6.60 - - -
BNZ - Rapid Repay 6.19 - - -
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First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
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Housing NZ Corp 5.75 5.50 6.30 6.40
HSBC Premier 6.24 5.59 6.29 6.55
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HSBC Special - - 5.79 -
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Kiwibank 5.90 5.69 5.99 6.40
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 5.60 - - -
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RESIMAC LVR < 80% 5.84 5.64 5.99 6.55
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SBS LVR < 80% - - - -
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