The latest data released for KiwiSaver performance as at December 31, 2012 is from Brook. Our story covering the returns to September 30, 2012 can be found here.
Brook continues to deliver superior long-term performance to its KiwiSaver members with the Growth Fund being ranked number one in its category over five years as reported in the latest Morningstar performance publication.
The one-year results have been relatively disappointing with the same fund performing below par and at the rear of the field.
When examining the returns Brook's top ranking Growth Fund has provided returns in-excess of 7.5% per annum above its underlying benchmark since inception.
The last 12-months to December 31 shows this same fund trails its benchmark by approxiamtely 1.6%. Having said this, the manager recorded positive outpeformance across two and three year returns.
The Growth Fund has a benchmark of 50% global equities; 40% Australasian equities and 10% to Cash, Infrastrucutre, Property and Alternative assets.
Brook through its active management approach currently has a small under weight exposure to Australasian equities and a similar over weight exposure to Cash, Infrastrucutre, Property and Alternative assets.
Given the strength of equities over the past six months had Brook been at, or above, its benchmark weight in Australasian equities the returns surely would have been enhanced further and they would not be bottom of the ladder.
In comparison the Balanced Fund returned a more modest 4.48% per annum excess return since inception. The manager also achieved excess returns over one, two and three years as well as since inception. The past two quarters has seen the fund return over 1% above its benchmark.
The Balanced Fund's benchmark is considerably more conservative with allocations of 30% global equities, 20% Australasian equities, 10% Infrastructure, Property & Alternative assets and 40% Cash and Fixed Interest.
The active positions for the Balanced Fund are an over-exposure to global equities and under-exposure to Infrastructure, Property & Alternative assets and Cash and Fixed Interest.
Some of the lag in performance for the Balanced Fund compared to their peers, will in our opinion be a combination of security selection and asset allocation. Our suspicion is a majority of the return detraction will have come from the split between income and growth assets.
For those investors who are more concerned with capital stability rather than chasing the high-octane returns on offer from equity markets, the Conservative Fund with 80% Cash and Fixed Interest and 20% global and Australasian shares (split 50/50) is likely to appeal.
The Conservative Fund, a recent addition to Brook's KiwiSaver suite, has outperformed its benchmark by 0.55% over the past three months and by approximately the same amount since its inception in June 2012.
There is quite a lot to like about the team at Brook in our opinion, but they still continue to struggle to attract funds. The Growth Funds' ranking of number one over the last five years should attract some attention. A few more rounds of above average returns for both of the established funds should provide Brook with some positive funds flow.
Below is a table of the longer term performance of the Brook 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.)
Brook KiwiSaver Scheme
(31 December 2012)
(1 Oct 2007)
* This fund started in July 2012 so the data is for the period to 31 December 2012.
More detailed performance reporting can be found here ».