Simplicity's growth fund posts early success
KiwiSaver provider Simplicity's managing director Sam Stubbs says his funds' first reported performance data are like "winning a bronze medal in your first event" despite a poor showing from its conservative fund.
Friday, February 3rd 2017, 6:00AM
Morningstar has released its KiwiSaver survey for the December quarter.
Kiwi Wealth's growth fund was a standout performer, thanks in part to its allocation to international assets.
But the new, low-fee market entrant also had an early win. It was the best performing growth fund in the quarter, returning 1.9% after fees and before tax.
The Kiwi Wealth KiwiSaver Growth, which Morningstar classifies as a multi-sector aggressive fund, returned 4.35% over the same period.
Stubbs said the result should surprise some of Simplicity's actively managed competitors.
"They are supposed to outperform the market and index tracking funds like ours, by picking winners. In most cases this hasn't happened. This is particularly embarrassing in the last quarter, when there was lots of volatility, and markets that should be favourable to stock pickers."
Melville Jessup Weaver also produced data, which put Simplicity in the middle of the pack for balanced funds, second-worst - to Fisher Funds - among the conservative and third-highest among the growth funds.
MJW has a bigger group of funds in its growth classification than Morningstar's and ranks Kiwi Wealth in the same category.
Stubbs said the growth fund was Simplicity’s “flagship” product, and 75% of its members were in it.
He said the poor performance of bonds had dragged down the conservative fund.
"Overall the business is going very well. After five months we have over 3200 members, $85,000,000 funds under management, are saving members $750,000 in fees annually, and are donating $35,000 to charity."
Over the five years to the end of 2016, Morningstar found ANZ OneAnswer KiwiSaver Growth, Milford KiwiSaver Balanced, and Aon Russell Lifepoints had been the top-performing options in their respective categories.
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