Over half of the 200 or so KiwiSaver funds remained under water as at the end of March despite a strong bounce in markets during the first quarter of 2019, according to research from financial product comparison website, Pocketwise.
Binu Paul, Pocketwise co-founder, said the late 2018 global equity market slump pushed about 80 per cent of all KiwiSaver funds into the red – with some reporting losses of 20 per cent.
“This is the first time KiwiSaver members have seen those sorts of losses when they’ve actually had enough money in their accounts to matter,” Paul said. “For example, some KiwiSaver members now have $100,000 or more – that could have dropped by $20,000 last year.”
He said given the regime had just launched before the 2008 peak of the global financial crisis any KiwiSaver member losses at the time would have been tiny in nominal terms.
The reverse market swing upwards during the March quarter had still left more than half of KiwiSaver funds below their 2018 high points, Paul said.
Ongoing volatility could see KiwiSaver members make knee-jerk investment choices, he said, unless they had made a clear “informed decision around choosing appropriate funds”.
According to data from Australian researcher Strategic Insight (SI), total KiwiSaver investment returns amounted to $3.4 billion during the March quarter following a $2.6 billion loss in the previous three-month period.
Overall, the KiwiSaver market climbed $4.5 billion in the three months to March 31 to hit $56.7 billion as regular inflows of $1.1 billion coupled with the strong investment performance, the SI report says.
The SI data shows eight of the top 13 KiwiSaver providers grew above the market average of 8.6 per cent in the March quarter with four – Booster, Generate, Milford and Smartshares – recording double-digit results.
Generate (up 17.7 per cent) was the fastest-growing KiwiSaver scheme during the period followed by Milford (11.5 per cent), Booster (10.6 per cent) and Smartshares (10.4 per cent).
BNZ, which has historically been among the top two or three fastest-growers, slipped slightly off the pace in the March quarter with a 9.6 per cent increase that took the KiwiSaver scheme above $2 billion.
The latest quarter also marked a return to form for the biggest KiwiSaver provider, ANZ, which grew 9.3 per cent in the three months to March 31 – well above the five institutions chasing in its wake. As at the end of March, ANZ managed almost $13.5 billion across its three KiwiSaver schemes, up over $1 billion compared to the end of 2018.
ASB, the second-largest KiwiSaver firm, added more than $700 million in the March quarter to reach more than $10 billion under management.
AMP and Mercer reported the lowest quarterly growth of 6.8 per cent and 5.8 per cent, respectively: however, the latter breached the $2 billion level for the first time, the SI report shows.