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KiwiSaver returns better than expected with ANZ, Mercer and Milford dominating many categories over 3-years

Posted in KiwiSaver

By Craig Simpson

Between them, ANZ, Mercer and Milford dominate the top places in the various sector rankings for the period ending September 30.

ANZ and Milford dominate the multi-sector areas while Mercer shows their skills in single sector funds. 

Overall the results show those funds with a bias towards growth assets such as shares have performed considerably better than those with higher concentration of cash and fixed income securities.

These returns reflects both the improved global equity market situtation and the more recent events which have resulted in rising interest rates and capital losses (on paper) for fixed income investors 

All of the KiwiSaver managers who are required to file their quarterly disclosure statements have done so however these are not the easiest things to find as many managers have decided to bury them in the depths of their websites rather than promote them on their respective website home pages. In a competitive market which is moving towards greater transparency I did not expect to have to rabbit around site maps and dark alleys to find the documents.

We have collated data from many of the managers who have reported thus far and have retained our methodology of using before tax and after fee returns and made one further adjustment for an estimate of 'outside fund fees' (member fees and other expenses). This will provide different results to what many research houses or commentators may be reporting and provides what we think is a better assessment of the before tax returns.

Why have we not based our performance tables on the new net of tax and fee numbers reported in quarterly disclosure statements?

Simply, the data being reported is for discrete one year periods and is so out of date (as at March 31 each year) so in my opinion analysis of these out-of-date data is meaningless to investors.

The only 'current' performance data being reported is for the past quarter and 12 months which is too short of a timeframe to provide any meaningful analysis or commentary for readers.

Although the return information is not overly useful, other data covering key people, asset allocations and top 10 positions is well worth examining and will provide some insights into what is driving some of the performance numbers. I believe the new reporting format is a step in the right direction but still has some way to go before it will become a hot topic for cab drivers and neighbours at barbeques.

The following tables outline the top 3 performers on a adjusted basis over the past three, two and one years for each of the main categories. To save readers from the same frustrations we encountered, a link to the periodic disclosure forms is included in the table.

Can't see your fund? You can review the full ranking tables by clicking here.

Default 3yr 2yr 1yr Periodic Disclosure Statement
ANZ OnePath Conservative 5.8   4.9
Mercer Conservative 5.5 6.7 6.4
ASB Conservative 4.8   4.6
Sector average (of funds reported) 5.0 5.8 4.8  

Based on our performance rankings and return calculation methodology the worst performing Default fund in this sector is the Tower Cash Enhanced Fund

Conservative 3yr 2yr 1yr Periodic Disclosure Statement
Westpac Capital Protection Plan 1 9.6 15.8 19.7
Westpac Capital Protection Plan 2 9.6 15.8 19.7
ANZ OnePath Conservative 5.8   4.9
Sector average (of funds reported) 5.4 7.5 7.0  

Based on our performance rankings and return calculation methodology the worst performing Conservative funds in this sector are the Grosvenor Enhanced Income Fund and Tower Preservation Fund

Moderate 3yr 2yr 1yr Periodic Disclosure Statement
ANZ Conservative Balanced 7.5   9.1
ANZ OneAnswer Conservative Balanced 7.5   9.0
Aon Russell Lifepoints 2015 7.0 9.5 7.1
Sector average (of funds reported) 5.9 7.1 6.3  

Based on our performance rankings and return calculation methodology the worst performing Moderate fund in this sector is the Craig's IP Conservative Fund

Balanced 3yr 2yr 1yr Periodic Disclosure Statement
Milford Balanced 10.5 15.5 16.0
ANZ OneAnswer Balanced 9.0   12.6
ANZ Balanced 9.0   12.6
Sector average (of funds reported) 7.2 11.1 10.3  

Based on our performance rankings and return calculation methodology the worst performing Balanced fund in this sector is the Grosvenor Balanced Fund

Growth 3yr 2yr 1yr Periodic Disclosure Statement
ANZ OneAnswer Balanced Growth Fund 10.5   16.2
ANZ Balanced Growth 10.5   16.2
AMP ANZ OnePath Balanced 10.3 14.5 15.0
Sector average (of funds reported) 7.3 11.4 12.1  

Based on our performance rankings and return calculation methodology the worst performing Growth fund in this sector is the Law Retirement Balanced Fund

Aggressive 3yr 2yr 1yr Periodic Disclosure Statement
Milford Active Growth 14.9 21.6 21.6
Aon Milford 14.5 21.1 20.9
ANZ Growth 11.9   19.8
Sector average (of funds reported) 8.3 13.9 6.4  

Based on our performance rankings and return calculation methodology the worst performing Aggressive fund in this sector is the Law Retirement Dynamic Fund

As more return data is collated we will update the tables and commentary as appropriate.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

10 Comments

Great article. Excellent work

Great article. Excellent work Craig.

Thanks for that KH. Craig.

Thanks for that KH.
Craig.

"the results show those funds

"the results show those funds with a bias towards growth assets such as shares"
 
Shares reflect the pumping of QE, collective wishful thinking,  and? How much is genuine increase in some sort of sustainable activity? With, say,  a two-decade window (not unreasonable given peoples expectations of ks) I suggest 'none'.
 
So the 'return' is 'if you withdraw in cash, now. The rest is so much chimera, with two medium-term possibilities: devaluation of the shares, or inflation dealing to the 'buying power' while retaining the munbers.
 
 

Hi PDK You make a very good

Hi PDK
You make a very good point re QE pushing up equities and this has artificially boosted returns which I am concerned about and as you allude to what happens when the music stops.
In terms of sustainable activity from the companies many invest into I would hazard a guess that outside those funds with responsible investment mandates at their core there would be very little investment in sustainable activity which is a pity.
I think we will see both devaluation and inflation so many will get the double whammy unfortunately.
Craig.

Do you think KIWISAVER funds

Do you think KIWISAVER funds are safe, the elderlies pensions and savings worldwide are being plundered as we blog.
All change, no change. 
This never ending debt scam has to stop.
Fraud is fraud is fraud, Theft is theft, even when your illustrious leaders promote it.

The previous government in

The previous government in Australia were gonna have a crack at looting their $A 1.4 trillion honeypot .... luckily , they got turfed from office like the lying , thieving dogs that they were .... are ...
 
.... don't imagine for a second , that KS funds won't similarly be eyed up by a future spendthrift government here in Godzone ...

GBH, "crack at looting" URL,

GBH,
"crack at looting" URL, I'd like to read that please.
Even though I dont like zerohedge,
http://www.zerohedge.com/news/2013-09-06/poland-confiscates-half-private...
Not without precident, hence I wont touch a pension fund....pay down debt it always remains.
Its quite a good piece, shows up similar endevours here. eg When the Kapiti council recently re-valued the land under its roads to allow it to take on more debt....
Spains pension funds are bankrupt also as they have huge public debt that wont be paid out.
Apart from that,
a) we have already heard from Pollies that the Cullen Fund should be concentrating more on NZ than seeking the best returns.
b) Im sure there will be increasing pressure on the kiwisaver managers to invest in NZ debt.
c) I'll also add that the rate of return on the surface (of council and gvn debt) looks and will increasingly look quite attractive compared to private debt, especially going forward as there is an asset behind them, ie a rate payer and PAYE, ie a trapped payer.
even Dont suggest that this is a Left thing, its not IMHO, its any Govn. And I'd suggest the right if anything will be driving for the "pots of gold" even harder.  Bushie pillaged enough to show that.
regards
 
 

Ah GBH but those intending to

Ah GBH but those intending to have a crack at looting the fund wrote a little piece of legislation that allowed them the ability to self-manage their own funds. I know quite a few Australians who chose that measure as a precaution. I assume in Godzone that should they ever think of par-taking in a little bit of looting that similar legislation/policy will be implemented in a timely fashion to allow them to complete the set-up of self-managing their own funds.

Very helpfull artical Craig -

Very helpfull artical Craig - thanks for the good work.

Excellent article. Quick

Excellent article. Quick question....why are the Kiwibank Gareth Morgan funds not included in the performance comparisons?