The KiwiSaver growth/income split hit the exact 60/40 level of an idealised balanced portfolio during a slightly risk-off start to 2025 that saw assets tracked by Morningstar decline by about $700 million quarter-on-quarter.
Total KiwiSaver funds under management in the Morningstar March quarterly report amounted to about $121.2 billion, down from the almost $121.9 billion recorded three months previously.
Member contributions maintained an almost steady-state KiwiSaver universe, counter-weighting poor investment returns over the three months to March 31 that fell into the red on aggregate for all diversified fund sectors other than conservative.
Diversified, or multi-asset in the Morningstar lingo, fund returns for the quarter ranged from 0.2 per cent for the conservative cohort to the aggressive result of -3.7 per cent.
But longer-term KiwiSaver diversified fund returns remain in line with risk-weighted asset allocation theory.
Greg Bunkall, Morningstar global fund data director, says in the report: “Over 10 years, the aggressive category average has given investors an annualized return of 8.3%, followed by growth (7.5%), balanced (6.1%), moderate (4.3%), and conservative (3.9%).”
Across the entire KiwiSaver 309-product set in the Morningstar database, three-month performance figures spanned the -23.1 per cent for the micro-niche Kernel S&P Kensho Moonshots Innovation Fund to 9.7 per cent in the NZX-owned SuperLife Europe strategy.
Kernel also book-ended both extremes of the one-year return spectrum with a 26.1 per cent return for its global infrastructure product and -16 per cent for the S&P Kensho Electric Vehicle fund.
Despite the wide performance differential in sector-specific products, almost 90 per cent of KiwiSaver money surveyed by Morningstar falls into diversified funds where the growth category remains the most popular with almost $38.8 billion (or about a third of overall assets) as at the end of March.
Balanced funds held $25.4 billion at March 31 – or close to $30 billion including the $4.4 billion managed in the similarly risk-weighted default group – followed by moderate ($14.6 billion), aggressive ($13.4 billion) and conservative $9.3 billion.
After a torrid quarter for US equities, total KiwiSaver growth assets as measured by Morningstar equalled $72.7 billion at the end of March (versus $75.7 billion on December 31) while income assets rose from $46.1 billion to $48.5 billion over the same period, creating the perfect 60/40 blend.
Provider rankings were unchanged quarter-on-quarter in a top five headed by ANZ ($21.5 billion) followed by ASB ($18.2 billion), Fisher ($17.7 billion), Westpac/BT ($11.7 billion) and Milford ($11.1 billion).
However, during the three-month period ASB pulled further away from Fisher – the latter held a narrow lead at one stage – while Milford closed in on Westpac.
As shown in both the Morningstar report and the earlier Melville Jessup Weaver (MJW) investment survey, Milford had a stand-out March quarter performance after moving to a defensive posture last year.
“Milford had a strong quarter across most risk profiles, trimming its risk exposures going into the market sell off. Fisher and ANZ also showed some short term performance,” Bunkall says in the report.
In the default sector, both SuperLife and Simplicity – the more index-leaning of the six providers – “fell noticeably more”, he says, booking respective three-month returns of -3 per cent and -2.5 per cent compared to the median -1.7 per cent.
Over the maximum three-year timeframe for the new batch of default funds, however, annualised performance is more evenly spread from 4.7 per cent for the Westpac offering to the Booster score of 5.6 per cent.
The current cohort of six default funds launched in December 2021 under an asset allocation upgraded to balanced from the previous conservative setting: for the same three-year period, conservative funds in the Morningstar data returned a median 3.9 per cent.