Consultancy firm Melville Jessup Weaver (MJW) has added three locally owned schemes to its KiwiSaver quarterly reporting roster after they breached the billion-dollar barrier.
As of the just-published June quarter MJW investment survey, Generate ($1.9 billion), Simplicity ($1.1 billion) and the NZX-owned SuperLife ($1 billion) all appear among the KiwiSaver rankings.
“This recognises that the KiwiSaver market is evolving with rapid growth from some of the smaller providers,” the MJW report says.
Of the three newcomers to the MJW charts, the investment philosophical opposites of index-friendly Simplicity and actively managed Generate have been consistently been among the fastest-growing schemes in recent years while SuperLife has more-or-less kept up with average KiwiSaver growth rates.
In an accompanying analysis of KiwiSaver trends over the 14 months to the end of May this year, the MJW report shows, of the billionaires club, Simplicity recorded the highest pace of funds growth during the period – roughly doubling assets under management to reach more than $1.1 billion.
Generate and Milford Asset Management also turned in impressive fund growth-rates of about 60 per cent and 50 per cent, respectively, over the 14-month period.
“Simplicity, Generate and Milford are very strong. Each of these providers added between $500 and $800 million over the period, better than default providers AMP ($406 million), Booster ($425 million) and Mercer ($187 million),” the MJW study says.
“… The skew in membership is in fact more extreme than the skew in the assets profile. Milford, SuperLife and Simplicity have fewer members than the asset figures above might lead one to expect. This is because their members have, on average, higher balances.”
While bank-owned schemes continue to dominate KiwiSaver, the relative success of the three new entrants in the MJW survey shows there is room for competition in a sector poised to hit $70 billion this year (pending supportive markets).
The MJW study also notes both the Pie Funds-owned Juno and the Pathfinder CareSaver schemes have carved out respectable niches.
“Of the relatively new entrants, Juno stands out having more than quadrupled its assets in the period,” the report says. “From a standing start [in August 2019], Pathfinder’s CareSaver has gathered $26 million.”
Other recently launched schemes Nikko (in 2018) and Kōura (2019) reported respective funds under management of $9 million and $6 million as at May 31.
And the broader MJW investment survey reflects the across-the-board positivity in a quarter that continued the fastest market bounce-back in history begun late in the previous three-month period.
Virtually all strategies covered in the MJW report clocked positive returns in the June quarter, topped by the 26.5 per cent result for the Milford Dynamic fund (covering Australasian small caps).
Equity index returns for the latest quarter ranged from the late teens to almost 21 per cent (the S&P/ASX 200 unhedged) while bond markets delivered upwards of 2 per cent.
Ben Trollip, MJW principal, says in the report: “One could be forgiven for disbelieving the market returns for this quarter. The world remains steeped in battle with COVID-19 and the prospect of rolling lockdowns across many major economies looks possible….
“Nevertheless, we now have a stellar quarter in the history books. It remains to be seen what the rest of 2020 holds for financial markets.”
Trollip said the survey results also mirrored the ongoing divergence between growth and value equity managers (where the median manager in the former category outperformed the latter by over 7 per cent).
As well, he said the report shows active managers have delivered above-average returns in several categories including NZ shares. The median NZ equities manager in the MJW study outperformed the benchmark (before fees) across every time period ending June 30 this year.
“There is some evidence showing active can outperform,” Trollip said. “But you do have to pick the right managers.”