KiwiSaver exposure to growth assets continued to climb back over the 12 months to June 30 to fall just short of 59 per cent, new Morningstar data shows, up 2.6 per cent year-on-year.
The result is still shy of the almost 64 per cent growth allocation recorded in the June 2022 report – a figure that fell to under 56 per cent just six months later as global share markets tanked.
While the quarterly growth/income mix varies over time according to relative investment performance, longer-term data shows a marked shift towards riskier assets in member portfolios.
Since the end of the June quarter in 2014, KiwiSaver risk levels have dialled-up almost 15 per cent: at the time Morningstar measured the proportional growth/income split at about 45/55.
The default scheme revamp from conservative to balanced in December 2021 likely also moved the KiwiSaver needle a little to growth assets but the cohort remains a tiny piece of the overall market.
According to Morningstar figures, the six default funds managed about $3.9 billion between them, or 3.5 per cent of the almost $111 billion in the researcher’s database as at June 30.
In aggregate, the default bunch also notched up the best performance of all diversified KiwiSaver funds for the three-month period, returning 0.8 per cent versus 0.6 per cent for the wider balanced universe.
Greg Bunkall, Morningstar global fund data director, says in the report: “As for default funds Simplicity and Superlife made an appearance at the top of the table with the best returns of the quarter, to boost solid annual numbers. Most of the default funds punched out 10% returns for the year, with the notable exception of Fisher Funds.”
The Fisher (ex Kiwi Wealth) default fund returned 8.3 per cent over the 12 months to June 30 and -0.1 per cent in the quarter – the only negative score in a group topped by index-followers Simplicity and SuperLife, both up 1.2 per cent in the three-month period.
Performance results were also mixed in the non-default diversified KiwiSaver fund categories with red ink creeping in at the growthier end of the scale.
“Many multi sector KiwiSaver funds produced positive returns over the June quarter, and many produced negative returns with funds that contained risk assets struggling the most,” Bunkall says in the report.
In the aggressive category, for example, quarterly returns ranged from 1.9 per cent for the relatively new Kernel High Growth strategy to -1.7 per cent for the even-newer ANZ counterpart.
Both ANZ and ASB launched high-octane KiwiSaver funds during the previous 12 months.
Over the 10-year period, however, diversified fund returns in the Morningstar survey played to form with a steady increase in annualised returns from 4.1 per cent for conservative to 9.1 per cent in the aggressive peer group.
KiwiSaver market share remained largely unchanged quarter-on-quarter in a table of 22 providers spanning ANZ ($20.7 billion) to the $53 million Nikko (now known as GoalsGetter).
However, as a general multi-year trend, the larger Australian bank-owned providers and AMP have shed market share over the last five years as local contenders such as Milford, Simplicity, Generate and Booster gather assets.
Fisher Funds has also bought its way to the number two KiwiSaver provider spot by a nose from ASB.
And a handful of other NZ-owned challenger schemes including InvestNow, Kernel, Kōura and Pathfinder have seen accelerated growth off a low base. Other providers not in the Morningstar mix such as Sharesies and Aurora have also reported funds under management of about $145 million and $260 million as at the end of March.
NZ Funds hit close to $970 million at the of March, which would rank it 14th on the Morningstar KiwiSaver table if the manager still supplied data to the research house (it stopped the information flow about four years ago).