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New default KiwiSaver funds start in reverse

The new default KiwiSaver funds start with negative returns.

Tuesday, April 26th 2022, 7:47AM 1 Comment

The six new default KiwiSaver funds which started in December last year have got off to a rocky start with the average returns being - 5.5% in the three months to March 31.

It its latest research investment research report MJW says the same thing happened when KiwiSaver was launched in 2007.t

The new default funds were mandated by the government to have a greater proportion of growth assets than the previous default funds.

MJW says the funds are broadly similar, ranging from 50-60% in growth assets. Most aggressive are BNZ and Kiwi Wealth, while Westpac is the most conservative with just 50% allocated to growth assets.

In total, there was $2.6 billion invested in the default funds.

However, MJW says the quarter produced a poor result for most diversified funds.

The median KiwiSaver balanced fund returned -5.5% for the quarter, while the median growth fund returned -5.9%. The median conservative fund also saw a sobering loss (of 4.0%) for the quarter, reflecting the headwinds in fixed income markets.

Managers who performed well included Milford (top growth and balanced fund) and BNZ (top conservative fund). These funds benefitted from higher cash holdings than their peers, one of the only true safe havens this quarter.

Over the longer term, Milford continues to stand out with its strong risk-adjusted performance.

 

Tags: KiwiSaver

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Comments from our readers

On 26 April 2022 at 10:51 am Gordon Gecko said:
Have we all forgotten what happened when KiwiSaver started in 2007 - Default funds went backward pretty quickly too. Not sure this is news or am I missing something?

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 4.29 5.09 5.35
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 5.14 ▼5.79 6.15
TSB Special 4.79 4.34 ▼4.99 5.35
Unity 5.65 4.80 5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 19 May 2022 10:42am

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