SuperLife's KiwiSaver results show why you should invest in offshore bonds and hedge currency

SuperLife's KiwiSaver results show why you should invest in offshore bonds and hedge currency

SuperLife continues to out-perform a majority of its peer group across many of the sectors in which they participate.

The latest data released for their KiwiSaver performance as at March 31, 2013. Our previous story covering the returns to 30 September 2012 is here.

SuperLife offers a diverse range of multi-sector and single-sector options and there is something to suit almost everyone's risk appetite or investment preferences.

Over the past five years the best performing option has been the Overseas Non-Government Bond portfolio with returns of 10.1% per annum.

This is an exceptional return when you consider we have been in a low interest rate environment for some time now.

The other top performing funds are the NZ Shares, Overseas Government Bonds and NZ Bond portfolios with returns in excess of 9% per annum over the past five years. very few providers can boast this sort of performance from some of their funds over the last five years.

More recently over the past 12-months the NZ Share Fund returned 35.8% and this beats both Forsyth Barr and Craig's IP portfolios by a substantial margin. SuperLife does adopt an equal weighting policy for its NZ Share portfolio and this removes any biases to one specific company or industry sector.

The same philosophy is employed in the Australian portfolio however the returns from this market have not been as rewarding for investors.

The Gemino Fund as we pointed out in the last review in September 2012 is for thrill seekers and those with a higher tolerance to risk.

Over the past five years this portfolio of high growth potential shares has been the weakest performer returning -8.1% per annum. Yet over the past 12 months the same fund returned a shade over 28%.

In the Overseas Shares sector SuperLife offer a hedged and unhedged portfolio. The difference in the performance between the two funds over time demonstrates the benefits of hedging currency. Over the last year, hedging has added just under 10% to the underlying return and over the longer term the benefit has been 4.2% per annum.

The returns over time can be quite volatile and investors need to understand the objectives of the fund and ensure they are comfortable with spikes in performance over time.

For the Property portfolio investors are provided with exposure to NZ, Australian and International property securities which provides diversification away from the average New Zealander's residential property portfolio.

Investors wanting an ethical KiwiSaver option, the Ethica Fund may be suitable. Ethica’s objective is to provide a medium risk “balanced” portfolio of the main asset classes, while looking to maintain social, community and environmental standards.

Ethica is designed for someone with at least 10 to 12 years to retirement and who wishes to invest with a socially responsible investment focus. The manager expect Ethica to earn a positive “real” investment return after tax and inflation, over a 5 to 7 year period. Negative investment returns may occur, over a 12 month period, once every 5 to 7 years on average the manager has forecast.

Below is a table of the longer term performance of the SuperLife 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.)

SuperLife KiwiSaver Scheme
(31 March 2013)
1 year
(p.a.)
5 year
(p.a.)
Since inception (1 Oct 2007) (p.a.)
D Fund 9.5% 8.0% n/a
AIM First Home 7.9% 8.4% n/a
Cash 3.8% 5.0% n/a
NZ Bonds 8.1% 9.1% n/a
Overseas Govt Bonds 6.9% 9.1% n/a
Overseas Non-Govt Bonds 8.1% 10.1% n/a
AIM 30 9.6% 7.5% n/a
AIM 60 11.2% 5.8% n/a
AIM 80 11.8% 4.1% n/a
Managed 30 10.8% n/a n/a
Managed 60 13.1% 6.8% n/a
Ethica 12.8% 6.8% n/a
Gemino 28.4% -8.2% n/a
Emerging Markets 0.3% n/a n/a
Overseas Shares (unhedged) 7.7% 0.7% n/a
Overseas Shares (hedged) 17.1% 4.9% n/a
Australian Shares 7.8% 1.9% n/a
NZ Shares 35.8% 9.3% n/a
Property 21.9% 4.2% n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

More detailed performance reporting can be found here ».

For details of the latest available asset allocation mixes for each fund these are outlined below. The totals may not add to 100% due to rounding.

 

SuperLife KiwiSaver Scheme
(31 March 2013)

Cash
(%)
NZ Bonds (%) Global Bonds
(%)
Property    (%) NZ & AU  Shares
(%)
Global  Shares
(%)
Alternative Assets
(%)
Cash 100            
NZ Bonds   100          
Overseas Govt Bonds     100        
Overseas Non-Govt Bonds     100        
Property       100      
NZ Shares         100    
Australian Shares         100    
Overseas Shares hedged           100  
Overseas Shares unhedged           100  
Emerging Markets           100  
Gemino         100    
Ethica 4.9 28.3 7.6 10.8 26.6 21.6  
Managed 30 0.6 32.7 28.9 7.4 22.2 8.2  
Managed 60 2.9 16.3 15.2 8.6 29.4 27.7  
Aim 30 10 30 35 5 10 15  
Aim 60 5 17.5 17.5 10 20 30  
Aim 80 5 15   12.5 25 42.5  
Aim First Home 5 47.5 47.5        
The D Fund   40 38   11.5 10.5  

 

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