The NZ retail funds sector ticked over $100 billion for the first time after a bumper September quarter, according to the latest market data from Australian research house, Strategic Insight (SI).
Boosted by the seasonal flush of KiwiSaver member tax credits, regular investment inflows and friendly markets over the quarter, total retail funds under management jumped from about $96.6 billion as at the end of June to over $100.6 billion by September 30.
While KiwiSaver underpinned the market FUM strength (up 6.1 per cent for the quarter and 19.4 per cent over 12 months), the non-super retail fund sector also flourished, growing 2.2 per cent during the September quarter and 10.2 per cent annually.
The SI data shows KiwiSaver stood at about $54 billion at September 30 last year as non-super retail funds amounted to just under $40 billon. Other retail super funds (about $7 billion) and the fading insurance and investment bond market ($294 million) make up the difference.
During the September quarter Milford Asset Management also scooted above Mercer to claim the spot as NZ’s sixth-largest retail fund manager with almost $6 billion in FUM. Milford is just $200 million behind fifth-largest manager in the SI September tables, Fisher Funds – and growing at more than twice the rate of Fisher.
Milford, along with other recent crowd favourites BNZ, again topped FUM growth tables for the quarter, up almost 10 per cent and 9 per cent, respectively during the three months to September 30, the SI figures show.
The two managers were neck-and-neck in the longer distance growth race over the 12-month period with Milford ultimately putting its nose in front, up 38.4 per cent annually compared to 37.3 per cent for BNZ.
However, BNZ has about a third of Milford’s FUM with a tad under $2 billion as at September 30.
During the 12-month period, as well as Milford and BNZ most other managers saw “significant increases” in FUM, the SI report says, including “Kiwi Wealth (21.7%), Booster (21.6%), ASB (19.2%), Fisher (16.0%), BT / Westpac (13.6%) and ANZ (11.1%)”.
Only AMP (principally the group’s KiwiSaver and superannuation master trust) and Mercer reported single-digit annual FUM growth of 5.6 per cent and 6.6 per cent, respectively.
Total NZ retail fund FUM rose some 14.3 per cent during the 12 months to September 30, the SI report says, supported by strong net inflows and average investment returns of 8 per cent.
Gross fund inflows were up more than 19 per cent year-on-year during the 12-month stretch, SI says.
“Companies posting double digit percentage increases in their Inflows year on year included Generate (68.1%), Mercer (52.6%), Milford (49.5%), BNZ (30.9%), ASB (21.8%), Kiwi Wealth (21.2%) and BT / Westpac (19.7%),” the report says.
While the September 30 figure marked a watershed moment for the NZ retail funds sector, a rough December quarter – where most stock markets reported substantial falls – could see the end-of-year FUM figure drop below $100 billion.