KiwiSaver growth funds continue strong run

KiwiSaver growth funds continue strong run

KiwiSaver growth funds continue run of strong returns – Mercer’s KiwiSaver Survey

  • 16 May 2011
  • New Zealand, Auckland

KiwiSaver funds started 2011 strongly, despite global events, posting positive returns for the second consecutive quarter, according to Mercer’s KiwiSaver survey.

Following a solid finish to 2010, share market returns were again positive in the first quarter of 2011 despite growing unrest in the Middle East and North Africa, rising oil and commodity prices, and the earthquake and tsunami in Japan.

KiwiSaver funds posted positive returns across the board for the quarter ended 31 March 2011, with those with a higher allocation to shares and property performing best. The median KiwiSaver Growth Fund returned 3.8%, higher than the more conservative Default Fund median return of 1.6%.

The best performing fund for the quarter was Fidelity Life Aggressive Growth Fund which returned 5.6% for the quarter.

Martin Lewington, Head of Mercer New Zealand said funds were faring well given encouraging economic data and a robust corporate earnings season, however the upward movement was not without bumps during the quarter.

“Gains from January and February were given back in March as a result of investor nervousness around recent events in Japan and the Middle East and re-emerging concerns about Europe’s sovereign debt crisis. Volatility is far from over, and could impact on returns in the upcoming quarter,” Mr Lewington said.

“The global economy continues to improve. However, questions are being asked about how and when the monetary stimulus will be turned off and then what happens. Volatility of investment returns will always be with us and may continue to be elevated in the short term. In the medium to long term, investors will have to face the challenge of investing in inflationary times” he 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

1.6

ASB, AXA, OnePath

1.9

5.3

OnePath Conservative

6.1

Conservative

1.8

Grosvenor Conservative

3.1

5.8

Aon Russell Lifepoints

8.5

Balanced

2.5

Grosvenor Balanced

3.9

7.0

Aon Russell Balanced

8.9

Growth

3.8

Fidelity Life Aggressive

5.6

7.7

Aon Russell Lifepoints

9.1

 

 

Quarter Median Return (%)

1 Year Median Return (%)

3 Year Median Return (%)

PTD* Return (%pa)

Default

1.6

5.3

5.5

4.6

Conservative

1.8

5.8

5.4

4.4

Balanced

2.5

7.0

4.3

1.9

Growth

3.8

7.7

2.9

-0.8

* The period to date (PTD) is 3 years and 6 months.


About Mercer

Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @Mercer_NZ

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