The latest data released for KiwiSaver performance as at December 31, 2012 is from Forsyth Barr. Our story covering the returns to September 30, 2012 can be found here.
To steal part of a phrase from Forrest Gump, the lastest results from Forsyth Barr are "a bit like a box of chocolates".
Across the various strategies offered (both diversified and single sector) the only negative 12-month return was from the Socially Responsible Investment Fund (-2.3%). This fund is also in negative territory over three years and since its inception in June 2008. It is one of three funds offered that are in negative territory since they started, the others being the Australian Equities Fund and Global Equities Fund.
Forsyth Barr's fixed income strategies provided solid, if not spectacular returns over the past 12-months and since the three fixed income strategies started they have returned between 6.7% p.a. to 7.9% p.a. which is pretty good going when you have a low interest rate environment.
We are cautious of putting too much emphasis on the ratings research houses come up with as they are often the product of many moving parts and can be quite subjective. The research reports speaks favourably about the fixed income team and their internal processes. We see this as a positive for those investors with a bias towards fixed income assets in their portfolios.
The stand-out performers like many other managers we have reviewed have been the NZ equities and NZ listed property exposures. Over the last 12-months these two funds return 20.7% and 18.6% respectively. It is a pity these returns were below the comparable NZX indices. The NZX50 Gross returned 24.2% and NZX Property sector returned 20.5%.
Interestingly, another KiwiSaver provider who lists Forsyth Barr as their manager for NZ equities returned 37% (after tax and fees) for the last 12 months according to their website.
Admittedly there will be differences in the various stocks and weightings between the two portfolios and this will account for some of the return differential but we are left asking ouselves whether there is something seriously wrong with either the research, stock selection, trading strategy or individual weightings for a discrepancy of this magnitude to occur. The results over a three-year period are equally as graphic.
Investors serious about socially responsible investment will be disappointed to see their investment in the red over the last 12-months, three years and since inception especially when competitors are able to generate returns in to 10% to 17% range for the year to end of December 2012.
Within the Balanced and Growth strategies there is a significant exposure to Australasian equties and the Trans-Tasman markets continue to perform in the same way they did in the latter part of 2012 and some of Forsyth Barr's concentrated portoflio bets come off, we could see a big turn-around in some of their results.
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
(31 December 2012)
Since inception (26 June 2008)
|Premium Yield Fund||4.4%||n/a||7.3%|
|Local Authority Fund||4.3%||n/a||6.7%|
|Fixed Interest Fund||5.7%||n/a||7.9%|
|NZ Equities Fund||20.7%||n/a||6.7%|
|Australian Equities Fund||10.5%||n/a||-2.0%|
|Global Equities Fund||10.6%||n/a||-6.7%|
|Listed Property Fund||18.6%||n/a||3.7%|
|Socially Responsible Investment Fund||-2.3%||n/a||-1.3%|
* 5 year returns are not available as the funds were established in June 2008.
More detailed performance reporting can be found here ».