The latest data released for KiwiSaver performance as at September 30, 2012 is from Forsyth Barr.
Forsyth Barr like fellow stockbrokers Craigs Investment Partners have ventured into KiwiSaver offering a selection of multi-sector and single sector schemes.
Members have the ability to create their own portfolio mix (Personal Choice Portfolio) so long as the minimum allocation to any one investment sector is 5%.
Forsyth Barr have had more success managing their NZ share portfolio than the Australian equivalent. The NZ Equity portfolio is currently returning 3.5% above the NZX 50 Gross Index since June 2008; the Australian portfolio is currently 2.3% behind the ASX 200 Accumulation Index in NZ$.
The New Zealand and Australian equity strategies reflect the securities that Forysth Barr would want to own rather than what is prescribed by any particular index. The portfolios are therefore concentrated and the holdings in selected companies are sizeable. Up to 10% of the portfolios is held in cash for liquidity and transactional purposes. This will temper the growth of the funds but also assist in reducing the volatility when markets fall.
Within their fixed interest range, the NZ Fixed Interest and Premium Yield funds are delivering returns above their benchmarks. Of these two funds the Premium Yield fund is the star performer adding 3.2% per annum above its benchmark since inception. The Local Authority Fund on the other hand is currently trailing its benchmark by approximatley 1.3% per annum, but still providing members with a reasonable return of 7.7% per annum since inception.
For global equities the provider utilises expert international managers to gain exposure to a wide range of markets. Within the mix the portfolio currently has a 42% exposure to a global equity thematic fund. The manager identifies emerging themes or trends on multiple levels (economic, cultural, geographical, sectoral, industrial to name a few) which have yet to be recognised by investors. There are a wide range of themes the manager has idenfied ranging from 'Global Agribusiness' to 'Supply Chain Dominance' and 'Indian Ocean'. Each theme must be backed by sound investment rationale and research before being considered appropriate for investment.
Another strategy included under the global equity funds umbrella is an emerging opportuinities fund (approximately 29% of the fund). Within this specific strategy the manager invests into a concentrated portfolio of emerging economies such as Turkey, Brazil, Thailand, Mexico and India. Currently, just over 50% of the underlying investments are within the greater Asian region. The next largest exposure is to Latin America followed by emerging Europe.
It is unusual to see both a thematic and emerging opportunities strategy blended together within a global equity fund and especially one marketed to predominately unsophisticated investors within KiwiSaver. Looking at the since inception returns (28 June 2008 to 30 September 2012) we question whether Forsyth Barr have the right managers and/or distribution of capital to each manager. The data is reasonably short term and it may take some time for the strategy and managers to prove themselves.
Furthermore, the Global Equities fund is only partially hedged back to NZ$ and this will have contributed to some of its under-performance (in NZ$ terms) compared to its peers.
Below is a table of the longer term performance of the Forsyth Barr funds. The return data is before tax and after fees and is as published by the managers. (No adjustments have been made to take into account those additional fees which scheme providers may charge and which are not included in calculating the fund performance. We do make such adjustments, but they will not be included until the full benchmarking is published.)
Forsyth Barr KiwiSaver Scheme
Since inception (1 Oct 2007) (p.a.)
|Premium Yield Fund||6.1%||n/a||8.5%|
|Local Authority Fund||6.4%||n/a||7.7%|
|Fixed Interest Fund||9.1%||n/a||8.9%|
|NZ Equities Fund||14.1%||n/a||7.1%|
|Australian Equities Fund||12.0%||n/a||-2.3%|
|Global Equities Fund||9.6%||n/a||-7.4%|
|Listed Property Fund||16.3%||n/a||4.2%|
|Socially Responsible Investment Fund||8.6%||n/a||0.3%|
* 5 year returns are not available as the funds were established in June 2008.
More detailed performance reporting can be found here ».