The latest data released for KiwiSaver performance as at December 31, 2012 is from Milford Asset Management. Recent results show Milford continues to cement itself as one of the pre-eminent KiwiSaver providers.
Our previous story covering the September 30, 2012 returns can be found here.
In their January 2012 update Milford stated “Unfortunately the outlook for 2012 is not particularly encouraging and it will be difficult to achieve our 10% target”.
However, with the Active Growth Fund returning over 25% (after fees but before tax) and the Balanced Fund adding 18% (after fees but before tax) over the past 12-months Milford have out-done themselves.
To put these returns into context, the NZX 50 Index achieved 24.2% and the ASX 200 Gross Index (in NZ$ terms) 15.2%.
Cynics might suggest Milford got their inital 2012 forecasts horribly wrong. Or was it simply a matter of under-promise and over-deliver?
Looking ahead to 2013 Milford have again tried to temper investor expectations citing returns between 8% to 15% are expected this year. The mid point of this range is still above the manager's target of 10% per annum.
At the end of December 2012, the Active Growth Fund was predominately invested in NZ shares (46%) which just happened to be one of the world's best performing markets of 2012.
A further 24% was held in Australian shares and 26% held in Cash and Bonds. When you consider that a quarter of the funds invested in the Active Growth Fund were held in Cash and Bonds, the manager' s performance is quite remarkable.
Over the past 12-months Milford have seen opportunities to reduce their Cash and Bond holding from 44% and re-invest the proceeds into better performing NZ and Australian shares.
Interestingly, the one-year return of 25.9% for the Active Growth Fund was achieved with less than half the level of volatility (a measure of risk) of the benchmark NZX and ASX Indices. The significant exposure to Cash and Bonds is likely to have been a significant contributor to achieving an abnormally low volatility number.
In contrast, the Balanced Fund has a broader mix of assets and is approximately split 50/50 in terms of income and growth assets. The higher exposure to income focussed assets has tempered the recent returns from the fund. Still a return for the last 12 months of 18% (after fees but before tax) is nothing to sneeze at.
The December returns also reveal that Milford's Active Growth Fund's five year return of +10.9% per annum is nicely ahead of the targeted 10% per annum. Since inception in October 2007, the Active Growth Fund has returned 11.8% per annum (after fees but before tax) to investors.
The Balanced Fund has not been going that long (inception 1 April 2010) but has still achieved a respectable 7.9% per annum (after fees but before tax).
Milford's long term performance continues to show their team has significant skill when it comes to researching companies and allocating money to various asset classes.
Below is a table of the performance of the three Milford funds. The return data is before tax and after fees and is as published by the manager. (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.)
Milford KiwiSaver Scheme
|Since inception (p.a.)|
|Active Growth Fund||25.9%||10.9%||11.8%|
More detailed performance reporting can be found here ».
This story has been updated to include the Cash and Bond allocation as at December 2011.