Mercer struck form in the December quarter after growing NZ retail funds under management (FUM) by almost 11 per cent, more than double the rate of its nearest competitor, new data from Australian research firm Strategic Insight (SI) shows.
The performance saw Mercer grow retail FUM by about $500 million over the three-month period, closing out the year with almost $5.2 billion under management while increasing market share to 6.5 per cent compared to 5.9 per cent as at September 30, 2016.
Following the final quarter flourish, Mercer reported annual retail FUM growth of 19.1 per cent, placing it second to Nikko Asset Management, which continued its strong run with year-on-year growth of 43.1 per cent despite a lack-lustre closing stanza for 2016.
However, Nikko’s December quarter expansion of 2.1 per cent (bringing its total retail FUM to almost $1.2 billion) lagged only Mercer and Kiwi Wealth (up 4.2 per cent over the three months).
Quarterly growth for the rest of the pack ranged from -0.3 per cent at Fisher Funds to 2.1 per cent for AMP. Fisher relinquished fifth place on the SI retail FUM tables to Mercer following the December quarter despite registering a respectable 13.2 per cent increase over the 12-month period.
“Nikko (43.1%), Mercer (19.1%), Milford (18.1%), Booster (16.7%), Kiwi Wealth (16.2%), ASB (13.6%), Fisher (13.2%) and ANZ (12.0%) all reported double digit increases in their retail funds under management,” the SI survey says. Only Westpac and AMP fell shy of the 10 mark, adding 9.3 per cent and 8.3 per cent to retail FUM respectively over the 2016 calendar year.
With the exception of the Mercer/Fisher place swap, the top 10 manager rankings by size were more or less static over the quarter. ANZ tipped the scales with almost $22.9 billion under management as at December 31, retaining its distance from second-largest retail manager, ASB ($10.8 billion), despite seeing total market share fall 0.3 per cent to close at 29 per cent by year’s end.
AMP also joined the elite $10 billion retail FUM club over the final quarter, the SI research shows, piling on $211 million during the three months to finish with almost $10.1 billion under management.
Managers outside the big 10 struggled over the December quarter with nominal retail FUM in this group falling -0.6 per cent to just under $6.6 billion. During the year ‘other companies’ shared total FUM growth of only 3.5 per cent as their collective market share shrank from 9 per cent to 8.3 per cent, according to the SI figures.
Overall, the NZ retail fund market grew 1.6 per cent during the December quarter and 12 per cent over the year to wrap up 2016 with $78.9 billion “after recording strong 15.4% and 18.0% rises previously in both 2015 and 2014”.
“While underlying investment markets were modestly up over the whole of 2016 they also remain unpredictable at times; during the December quarter for example they were down slightly with an overall average investment return on Retail Funds of circa -0.2%,” the SI report says.
Gross annual retail inflows hit $21.5 billion in 2016, up more than $1.5 billion compared to the previous annual period and over four-times the figure in 2007, the year marking the birth of KiwiSaver. The government-mandated savings scheme again proved its value for retail managers adding 18.7 per cent in FUM during 2017 as the non-KiwiSaver fund market grew 7.2 per cent. With over $38.4 billion under management, KiwiSaver represents 48.7 per cent of all NZ retail FUM, while other managed funds total almost $33.6 billion (42.6 per cent market share).
Traditional superannuation funds grew slowly over 2016 (up 2.4 per cent) to about $6.5 billion as the insurance and investment bond sector continued its march into oblivion by shedding 7.2 per cent of FUM in 12 months to close at $312 million.
“Year on year Nikko, Milford, Fisher, BNZ, ANZ, ASB and BT/Westpac all posted above average annual Inflow growth rates,” the SI survey says.