Just two of the 13 largest KiwiSaver providers eked out positive net growth over the tough December quarter, likely buoyed by new member transfers rather than investment returns.
According to the latest data from Australian research house Strategic Insight (SI), only the BNZ and Generate schemes saw funds under management (FUM) grow during the three months to December 31 last year up a respective 1.1 per cent and 2.6 per cent – the latter jumping above $1 billion for the first time.
As the 2018 Investment News NZ KiwiSaver report details, both BNZ and Generate have been among the fastest-growing schemes over the last few years with the respective bank and boutique providers taking different distribution routes to success in the transfer market: Generate through its incentivised salesforce; BNZ via the usual bank methods.
Not even the other perennial KiwiSaver top-grower, Milford Asset Management, had enough funds-flow fuel to escape investment gravity during the December quarter as its FUM fizzled down 0.8 per cent (equating to a $10 million drop).
However, Milford was the best-of-the-rest over the three-month stretch that included net FUM-falls ranging from -1.4 per cent (ASB) to the almost-equal last pair of the NZX-owned SuperLife (-5.6 per cent) and AMP (-5.7 per cent).
In nominal terms, the biggest KiwiSaver provider, ANZ, experienced the largest fall over the period, bleeding almost $600 million (-4.5 per cent) to round out 2018 with roughly $12.3 billion under management.
Aside from the 13 named schemes in the SI report, the total ‘other’ providers’ FUM shrank 3.6 per cent during the three months to hit just over $2.1 billion at the end of the year: the fast-growing Simplicity, currently one of the SI others, may have seen net funds growth over the quarter.
The SI figures show total KiwiSaver FUM was down 3.3 per cent for the quarter, representing a net loss of $1.8 billion as the market fell from almost $54 billion at September 30 to $52.2 billion by the end of 2018. Net funds flow of $800 million into KiwiSaver over the three months to December 31 was more than cancelled out by investment losses of $2.6 billion, the SI report says.
All KiwiSaver funds covered in the Melville Jessup Weaver (MJW) December quarter survey reported investment losses for the three-month period. While MJW doesn’t span the entire KiwiSaver market, the average conservative, balanced and growth fund in the survey returned -1.3 per cent, -5.7 per cent and -8.1 per cent, respectively, over the December quarter. The defensively-positioned Mercer was the best-performer in four of the six MJW KiwiSaver fund risk categories with Milford (conservative) and AMP (moderate balanced) filling the remaining top spots.
Since the horror December quarter, most markets have rebounded to almost claw back previous losses.