Default, conservative funds fare best

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Default, conservative funds fare best amid ongoing volatility - Mercer’s KiwiSaver Survey

  • 17 November 2011
  • New Zealand, Auckland

Default and conservative KiwiSaver funds with low allocation to shares and property have been the best performers for the quarter - and the past year - as ongoing global volatility continues to impact KiwiSaver fund returns, according to Mercer’s KiwiSaver Survey for the quarter ended 30 September 2011.

While KiwiSaver diversified funds largely produced negative results for the quarter ended 30 September 2011, with a median return of -3.7%, the majority of default funds managed to stay positive with a median return of 0.2%. The more aggressive growth funds posted a median return of -7.1% for the period.

The best performing fund for the quarter was the default fund, OnePath Conservative, which returned 1.0% over the period.

In the 12 months to 30 September 2011, the median fund return was 1.5% (after fees but before tax). The best performing fund for the same period was OnePath Conservative, which returned 4.8% over the past 12 months.

Martin Lewington, Head of Mercer New Zealand said KiwiSaver funds could expect more of the same in the coming months.

“After a positive start to the year, global financial markets were highly volatile for the second consecutive quarter, with the impact of sovereign debt problems in Europe once again dominating investor sentiment.

“Closer to home the conditions are more positive; the New Zealand economy has grown by 0.5% on average for the past three quarters and the local sharemarket, which rose by 7% over the past year is one of the few markets in positive territory over this period. However, global conditions have dampened the outlook for investors with low interest rates and a stretched fiscal position in many developed nations giving investors cause to fear that the period of low or negative growth could persist for some time. KiwiSavers should ensure they have an appropriate balance between risk and return and expect continual uncertainty for some time” Mr Lewington said.

 

Last Quarter

Last 12 Months

Fund Type

Median Return (%)

Top Performing Fund

Top Fund Return (%)

Median Return (%)

Top Performing Fund

Top Fund Return (%)

Default

0.2

OnePath Conservative

1.0

3.4

OnePath Conservative

4.8

Conservative

-0.7

ANZ, FirstChoice Tracker, NBNZ, OnePath

0.2

3.4

OnePath Conservative Balanced

4.3

Balanced

-3.7

Milford Balanced

-1.3

1.3

OnePath Balanced

3.5

Growth

-7.1

Brook Growth

-3.6

-1.3

OnePath Balanced Growth

2.8

 

Mercer KiwiSaver Survey

3 mths (%)

1 yr (%pa)

2 yrs (%pa)

3 yrs (%pa)

4 yrs (%pa)

Default Universe Median

0.2

3.4

4.9

5.6

4.3

Conservative Universe Median

-0.7

3.4

5.3

5.2

3.6

Balanced Universe Median

-3.7

1.3

4.1

4.1

1.0

Growth Universe Median

-7.1

-1.3

2.7

1.9

-2.4


N.B. Returns stated in the survey are before tax and after fees (gross of tax and net of fees). 

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