The NZ managed funds market grew more than 7.3 per cent in the June quarter to reach about $210 billion, according to new Reserve Bank of NZ (RBNZ) figures.
In dollar terms, the June quarter added some $14.3 billion to total NZ funds under management (FUM) in the RBNZ survey, which excludes the $100 billion plus invested by Crown Financial Institution.
“The quarterly increase came as a result of financial market rebounds from the late March lows caused by the COVID-19 pandemic. Notably, holdings of listed shares increased 17.3% as local and international share-markets rose sharply after the month of March,” the RBNZ report says.
“KiwiSaver & Superannuation funds rose by 8.7% ($5.5b) and 5.8% ($1.6b) respectively.”
Year-on-year the total NZ FUM was up almost 7 per cent in the RBNZ survey.
As at the end of June, the KiwiSaver market recorded FUM of $69 billion, growing 8.7 per cent over the quarter and 5.4 per cent above the December 31, 2019, pre-COVID high.
“Other Superannuation also had an increase rising $1.6b to $29.9b, a 5.8% increase for the quarter,” the RBNZ report says. “However, other Superannuation is still $2.3b (-7.6%) below its pre-pandemic high in Q4 2019.”
The central bank survey found a quarterly surge in FUM across all product types it captures with private wealth seeing the highest jump – up 18.4 per cent to about $30 billion.
Retail unit trusts added 7.3 per cent in the June quarter to hit $46.4 billion while cash management trusts and wholesale clients recorded the weakest increases of 1.8 per cent and 0.9 per cent, respectively.
The RBNZ also noted a surge in equities FUM during the June quarter, which experienced the quickest share market rebound on record.
“For the quarter, total industry holdings of listed shares increased significantly from $72.3b to $84.8b (a rise of 17.3%, which is almost back to pre-pandemic levels),” the report says. “Short term debt securities increased by 23.0% and long term debt securities also increased slightly, growing 2.0%. Cash fell during the quarter, decreasing 10.1%.”
Further RBNZ data on the KiwiSaver market shows asset allocation in the sector has remained largely steady over the last two years. According to the central bank-collected statistics, the $69 billion in KiwiSaver funds was split almost equally between local and offshore assets as at the end of June.
Overall, KiwiSaver funds held just under $21 billion in NZ equities at June 30 and slightly over $21 billion in global shares. Debt securities were also almost equally shared between NZ and global assets – roughly $10 billion apiece – while cash was heavily weighted to local holdings (over $5.1 billion) compared to offshore ($1 billion).
The non-KiwiSaver retail unit trust market, however, favours NZ assets (almost $29 billion) over global investments ($17.4 billion), according to the RBNZ.