The NZ retail funds sector went backwards last year with all mid-to-large managers reporting annual declines, according to new figures from Australian research house, Plan for Life (PFL).
Overall, total retail funds under management (FUM) fell 7.8 per cent during the 2022 calendar year, the PFL report notes, with individual results among the 10 largest managers ranging from -3.2 per cent for Milford to the AMP low score of -13 per cent.
Milford (4.6 per cent) and AMP (1.2 per cent) reprised the respective top and bottom FUM-growth rankings over the December quarter, which was at least a positive period for all managers with an average increase of 2.4 per cent.
Both Fisher Funds and Mercer also saw double-digit annual FUM decreases of about 12 per cent while Westpac/BT (-3.6 per cent) was the best of the bank-based providers for the year: ANZ, ASB and BNZ reported falls of -7, -6.7 and -5.1 per cent, respectively, for the 12-month period.
The PFL report says the yearly dip in NZ retail FUM came largely on the back of poor investment returns as both bonds and equities disappointed in 2022.
“While global markets have subsequently bounced back nevertheless they remain vulnerable as governments continue to raise interest rates in an effort to rein in inflation caused by years of now discredited reckless and nonsensical ultra loose monetary policy,” the PFL note says.
However, the data also shows a dramatic year-on-year drop in gross annual inflows following the bumper 2021 when NZ investors tipped in more than $40 billion into retail funds.
Last year total gross inflows only reached $30.8 billion, about on par with the 2019 calendar year, equating to a decrease of more than 31 per cent compared to the previous 12-month period.
“Year on year while market leader ANZ (2.3%) reported a slight Inflows increase those of the other participants all finished lower with some of the largest percentage falls recorded by Simplicity (-59.2%), Fisher (-50.1%), BNZ (-48.4%), Milford (-41.1%), AMP (-38.3%) and Booster (-35.4%),” the report says.
The significant gross inflow drops for Simplicity, BNZ and Booster last year likely reflect the impact of default KiwiSaver fund transfers that pumped-up the relative figures for 2021.
Supported by mandated cash flows, the KiwiSaver sector fared best over 2022, as FUM dropped by 5.3 per cent to reach $88 billion while other non-superannuation managed funds declined by more than 10 per cent to finish just above $55 billion.
The PFL numbers differ a little from the Reserve Bank of NZ managed funds data that count KiwiSaver assets of almost $92 billion as at December 31 last year and retail unit trusts of about $54 billion.
Headed by Rael Solomon, the actuarial consulting and research firm PFL is part of the global Institutional Shareholder Services group.