The latest data released for KiwiSaver performance as at September 30, 2012 is from Smartkiwi.
Smartkiwi is a passively managed, low cost KiwiSaver scheme offered by Smartshares, a wholly owned subsidiary of the NZX.
There are three schemes on offer: Conservative, Balanced and Growth. With approximately $25 mln under management Smartkiwi is a small provider, and like many other managers excluded from being a default provider, have struggled to gain market share.
The Smartkiwi portfolio does not have a specific allocation to global shares (outside of Australia) and they utilise their own in-house exchange traded funds (ETF's) for the exposure to NZ and Australian shares. The fixed income (debt) component comprises either NZ Debt Market (NZDX) listed or unlisted bonds. These debt securities must have a credit rating of BBB- (investment grade) or above. The investment mandate permits holding Australian debt securities if they meet the minimum investment criteria.
The New Zealand share exposure is via SmartFONZ which tracks the performance of the NZX50 Portfolio Index. This index is similar to the NZX50 but each company is subject to a maximum weighting cap of 5%. Whether this index is appropriate to replicate and/or is representative of the performance of the NZ market is open to debate.
The Australian exposure is different to most providers as it offers an exposure to 50 mid-cap stocks listed on the Australian Stock Exchange (ASX). The mid-cap shares in the portfolio make up approximately 11% of the total market capitalisation of the ASX. The constituents readers will immediately recognise include: James Hardie, Fairfax Media, Seek, Ansell, Caltex Australia, Downer EDI, Aristocrat Leisure, David Jones, Harvey Norman & Myer Holdings.
Smartkiwi's Growth Fund is made up entirely of NZ and Australian shares with a bias towards local shares. Unlike other KiwiSaver growth funds there is no allocation to Cash or Fixed Interest. The higher allocation to NZ shares in this portfolio has saved member's from experiencing a severe loss of capital. The ASX mid-cap index has returned -7.65% per annum in A$ terms over the past five years according to the factsheet published by Standard & Poors.
Of the three strategies on offer the best performer over the last 12 months has been the Growth fund with a return of +11% per annum.
Over the last 5 years Smartkiwi's portfolios have underperformed the rest of the market and we put this down to a combination of being passively managed, not having an exposure to fully NZ$ hedged global bonds, not having a global share allocation and having a bias towards mid-cap Australian shares.
Below is a table of the longer term performance of the Smartkiwi 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.)
Smartkiwi KiwiSaver Scheme
Since inception (1 Oct 2007) (p.a.)
* Smartkiwi does not publish their returns on the website so this data has been calculated using monthly unit prices sourced from the manager.
More detailed performance reporting can be found here ».