In the last quarterly report before the looming default scheme shake-up re-jigs the league tables, Morningstar data shows recent KiwiSaver trends persist with large institutions slowly losing market share to challenger brands.
The September quarter Morningstar KiwiSaver report reveals Milford Asset Management, in particular, as the stand-out growth player. Milford added 1.2 per cent to its market share over the first nine months of 2021 to end the period at over $4.5 billion, or 5.2 per cent of the total Morningstar KiwiSaver universe (which covers over 90 per cent of the entire assets under management in the sector).
Other Kiwi contenders – Generate and Simplicity – also stayed on their respective growth trajectories, gaining 0.4 per cent market share each during the nine months to September 30.
Booster, Juno and even the SBS-owned Lifestages KiwiSaver scheme all carved-out market share gains over 2021 of 0.2 to 0.3 per cent.
Most of the larger players – notably, AMP, ANZ, ASB and Westpac – all dropped back (in relative terms) in the year to September 30. ANZ saw market share fall from 23 per cent at the end of 2020 to 21.8 per cent by the end of September while still growing funds under management by about $1.5 billion to close the period at $19 billion.
ASB gave away 0.9 per cent market share during the nine-month stretch followed by AMP and Westpac that both dropped 0.7 per cent. With the exception of Westpac, all of the top five KiwiSaver schemes stand to lose an average $700 million plus apiece in the default transition process set to kick-off in December.
Government estimates about $3.6 billion will flow from the five sacked default providers – AMP, ANZ, ASB, Mercer and Fisher Funds – to the six new and surviving schemes (BNZ, Booster, Kiwi Wealth, Simplicity, Smartshares and Westpac).
Aside from the on-trend movements, other KiwiSaver schemes in the Morningstar survey held market share steady in 2021, however, the overall rankings (and market share) changed a little due to the debut of the newly retailised Medical scheme in the lists.
As reported in July, the Medical Assurance Society (MAS) KiwiSaver moved to a full retail model after operating as a restricted scheme since 2012 when new rules were introduced.
The MAS KiwiSaver reported just over $1 billion in funds under management at the end of September, putting it 18th on the list of 20 providers covered by Morningstar.
Tim Murphy, Morningstar director manager research Asia-Pacific, said KiwiSaver funds on average saw drab returns over the quarter in line with “subdued underlying market conditions”.
Most diversified funds returned under 1 per cent over the three-month period, Murphy said in the report.
“Funds with larger exposures to domestic growth assets and lower exposures to domestic fixed interest generally outperformed over the three-month period,” he said. “… Over 10 years, the Aggressive category average has given investors an annualised return of 11.4%, followed by Growth (11.2%), Balanced (9.2%), Moderate (6.7%), and Conservative (5.9%).”