The NZ managed funds sector soared through the $300 billion threshold during the September quarter after a solid three-month period lifted annual growth to 14.4 per cent.
New Reserve Bank of NZ (RBNZ) data shows the local funds management market topped out at $307.1 billion on September 30 with KiwiSaver accounting for about $122.6 billion, or 40 per cent of the whole.
KiwiSaver funds grew 21.6 per cent year-on-year, buoyed by flows and surging markets while the legacy superannuation sector remained flat for the quarter and up 10 per cent for the 12 months.
Almost $72 billion, or roughly 60 per cent, of KiwiSaver money is held offshore (including over $53 billion in equities) with the remaining $50.6 billion investment at home, of which about half is in shares.
In a mild risk-on quarter across the entire funds market, equities and long-term bonds recorded strong growth as shorter-dated fixed interest securities stalled.
“Total Industry holdings of listed shares went up 4.5% this quarter, from $140.3b to $146.7b. This is up 21.7% annually,” the RBNZ report says.
“Long term debt securities increased 3.0% this quarter, from $78.6b to $81.0b. That is an annual increase of 8.5%.”
Holdings of short-term debt fell for the second quarter in succession, down 2.4 per cent for the latest three-month period to reach $12.9 billion but down just a smidge (0.1 per cent) year-on-year.
The shift up the risk scale, however, was balanced by another positive showing in cash – up 0.8 per cent for the three months and 18.7 per cent over the 12 months to September 30 to total just under $50 billion.
“Cash management trusts increased by 1.9% this quarter, from $25.2b to $25.7b, and annually by 13.1%.”
Viewed across product type, retail unit trust investments jumped 2.8 per cent in the quarter and 15.1 per cent year-on-year to land at 69.6 billion.
“Private wealth funds increased 3.2% for the quarter, from $41.8b to $43.2b, and saw a 10.3% annual increase,” the RBNZ report says.
“Wholesale clients decreased by 1.6% quarterly, from $25.9b to $25.4b, but recorded an annual increase of 2.3%.”
Approximately $51 billion of the NZ funds pool is stored in individually managed portfolios, which covers some of the discretionary investment management sector.