Aon's KiwiSaver results show there is very little difference in returns across a majority of the funds over a five year period

Aon's KiwiSaver results show there is very little difference in returns across a majority of the funds over a five year period

The latest data released for KiwiSaver performance as at September 30, 2013 is from Aon. (Our previous story covering the June 30 returns can be found here.)

Over the past three months the only Aon KiwiSaver fund to record negative one, three and six month returns was the Aon Russell Conservative Fund.

The Russell LifePoint 2015 Fund recorded a negative one month return for September. Otherwise all other returns across all time periods we monitor were positive.

Returns are principally a function of where the money is invested across the various asset classes and how well it is managed. The relative poor performance of the Aon Russell Conservative strategies is a result of their large exposures to fixed income assets both in NZ and offshore. Interest rates have risen sharply over the past quarter resulting in investors portfolios going backwards in the short-term.

The standout performer from the Aon stable of KiwiSaver funds continues to be the Milford Active Growth Fund (21.5%), followed by the Russell LifePoints 2045 Fund (19.5%). These returns are before tax at 28% is deducted.

Over the past five years there is approximately 5.5% difference between the two best funds offered by Aon. No surprises, but the Aon Milford fund is number one (again), and the next best option is the Aon OnePath Balanced Fund. Following close behind these two is the Aon Russell Conservative Fund.

A bulk of the money invested under Aon's KiwiSaver scheme is in the Aon Milford Active Growth Fund and Aon Russell Conservative Fund which hardly surprises as as they have been some of the better performing funds. The second best performing fund (Aon Onepath Balanced Fund) has a pultry 6% of all money invested in the Aon scheme which is hard to believe.

Comparing the various Balanced funds across the Aon range there are some  variances in exposures across the main asset classes. Below we outline some of the core observations across the various funds:

Aon Russell - have a bias towards global bonds over domestic; approxiamately 50/50 split between hedged and unhedged global equities; equity exposure is 2:1 in favour of global equities over Australasian equities; there are subtle differences between the Balanced Fund and the LifePoints 2035 Fund - generally within 3% of each other.

Aon OnePath - invests predominately in OnePath products but outsources global bonds to leading bond manager Pimco (via Pimco Global Bond Fund) and has 9% exposure to Milford's KiwiSaver Active Growth Fund; property exposure is 50/50 domestic/global.

Aon Tyndall - has a benchmark allocation of 18% to absolute return strategies; 50% weighting to equities with roughly 2:1 ratio favouring global over Australasian and a dedicated property exposure of 5%.

Although Aon Russell split out their hedged vs unhedged international equity positions other managers will have adopted a currency hedging policy, but these have not been disclosed to us at the time of writing. 

The table of returns shown below illustrates that over the past five years there is very little difference in returns across a majority of the risk spectrum (Conservative to Aggressive) if we exclude Cash and the Aon Milford Fund which are significant outliers. Within the balanced fund category the Aon Tyndall Balanced Fund is performing below its peers. 

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

Aon KiwiSaver Scheme
(30 September 2013)
1 year
(p.a.)
5 year
(p.a.)
Since inception
(1 Oct 2007)
(p.a.)**
Aon OnePath Cash 2.5% 2.9% n/a
Aon Tyndall Cash 3.2% 3.7% n/a
Aon OnePath Balanced Fund 13.5% 8.5% n/a
Aon Tyndall Balanced 11.5% 5.5% n/a
Aon Russell LifePoints Conservative 6.1% 8.1% n/a
Aon Russell LifePoints Target Date 2015 7.6% 7.8% n/a
Aon Russell LifePoints Moderate 10.2% 8.0% n/a
Aon Russell LifePoints Target Date 2025 12.1% 7.5% n/a
Aon Russell LifePoints Balanced 14.5% 7.6% n/a
Aon Russell LifePoints Target Date 2035 16.0% 7.2% n/a
Aon Russell LifePoints Growth 18.0% 7.3% n/a
Aon Russell LifePoints Target Date 2045 19.5% 6.8% n/a
Aon Milford Active Growth 21.5% 14.0% n/a

 

 

 

 

 

 

 

 

 

 

 

 

*Once the net of tax and fees returns are available we will update this story

** The annualised return since inception data has not been made available to us by the administrator.

More detailed performance reporting can be found here ».

The tables below outlines the assset allocation for each Aon KiwiSaver fund as at September 30.

Aon KiwiSaver
30 Sept 2013

Cash
(%)
NZ Bonds (%) Global
Bonds
(%)
Property
(%)
Global
Property
(%)
NZ & AU
Shares
(%)
Global  Shares
(%)
Absolute Return
(%)
OnePath Cash 100              
Tyndall Cash 100              
Tyndall Balanced #   17.0 12.0 5.0   16.0 32.0 18.0
Russell LP Conservative   16.3 63.7     6.1 13.9  
Russell LP 2015   15.3 58.7     8.1 7.9  
Russell LP Moderate   12.2 47.7     14.2 25.8  
Russell LP 2025   11.2 42.8     15.2 30.8  
Russell LP Balanced   8.1 31.8     20.3 39.8  
Russell LP 2035   7.1 28.8     21.3 42.7  
Russell LP Growth   5.1 19.9     25.4 49.7  
Russell LP 2045   4.1 16.9     26.4 52.7  

 

 

 

 

 

 

 

 

 

 

# benchmark asset allocation only - actual positions were not available.

Aon KiwiSaver
30 Sept 2013

OnePath Cash
(%)
SIL Capital Stable (%) Pimco Global Bonds (%) OnePath
Property
(%)
OnePath Global
Property
(%)
OnePath NZ & AU
Shares
(%)
OnePath  Global  Shares
(%)
Milford KS Active Growth
(%)
OnePath Balanced 10.5 15.1 15.1 5.0 5.1 15.2 25.0 9.1

 

 

 

 

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