Our comprehensive review of regular savings returns to March 31, 2015 for aggressive KiwiSaver funds, identifying who has the best long-term returns

Our comprehensive review of regular savings returns to March 31, 2015 for aggressive KiwiSaver funds, identifying who has the best long-term returns

For the second quarter in a row an ANZ owned property fund has beaten Milford's Active Growth Fund for the top spot on a long-term regular-savings return basis.

Over the last three year period our analysis shows both ANZ and Milford's top performing funds are in turn beaten by Kiwi Wealth's Growth Fund.

Of the 23 funds that have been going since April 2008, all but 8 have returned double digit long run returns based on our unique regular savings basis. This is impressive given for the first two to three years global equities which make up a large portion of the total asset allocation for many of the funds were in a severe state of depression.

The last six years have been a golden age for shares and those having a long enough investment time horizon, a high degree of risk tolerance and patience to ride out the worst period for global shares in 70-years, have benefited handsomely.

Funds with heavy exposures to listed Property and Australasian equities have been the best performing funds since April 2008 based on our regular savings model.

Kiwi Wealth has been the most impressive recent improver. The next best improver is the NZX administered Smart Kiwi Growth Fund, although their fund is sitting in the bottom half of the leader board and would require many more quarters of exceptional out-performance to make any noticeable headway up the leader board, so we probably can't get too excited just yet.

What this and our last few category reviews is showing, is the top managers are able to deliver consistent returns over the long term and some others are simply there to make up numbers.

This may appear harsh but if you are trailing the leading funds by 5% plus over the long term you really have to question what the manager is doing to justify their fees and your hard earned cash.

ANZ's OneAnswer International Property is our ‘best-in-class’ Aggressive fund performer.

To be awarded this classification it must not only have the best track record for the full period, but its return over the past three years must not be less that those it earned over the full period.

On our regular savings basis, the average of the top five funds would have resulted in you earning $17,327 more than you have contributed.

While that may not seem a lot based on an average ending fund value of $40,226 it is significant when you realise that $22,899 is what you, your employer and the Government contributed.

The average of the top five Aggressive funds earnings after-tax and after-fees is $9,838 more than the $7,489 you would have earned from the average of the top five Default funds.

Compared to the last review in December 2014, there have been a few of the Mercer funds drop off the list. The funds were closed for commercial reasons and were mainly single sector offerings which failed to attract sufficient funds to justify keeping them open. 

The second table below highlights those funds that have not been going the full distance and they are ranked on the level of contributions made based on our regular savings calculations.

Many of the funds in the second table have achieved returns over the short to medium term which would see them placed in the upper echelons of the main table if we ranked solely on performance.

Here are the full comparison as at March 31, 2015 for Aggressive Funds.

 
Aggressive Funds      
Cumulative
contributions
(EE, ER, Govt)
+ Cum net gains
after all tax, fees
Effective
cum return
= Ending value
in your account
Effective
last 3 yr
return % p.a.
since April 2008 X Y Z
to March 2015      
$
% p.a.
$
                 
ANZ OneAnswer Int'l Property A A P 22,899 19,162 14.3% 42,062 14.9%
Milford Active Growth A G AE 22,899 17,951 13.6% 40,850 15.2%
Aon Milford A G AE 22,899 17,814 13.5% 40,713 15.1%
ANZ OneAnswerAustralasian Property A A P
22,899
16,737
12.9%
39,637
13.8%
ANZ OneAnswer Australasian Share A A AE
22,899
14,970 11.8% 37,870 14.0%
Kiwi Wealth Growth Fund A A A 22,899 14,705 11.6% 37,605 16.2%
ANZ OneAnswer Growth A G G
22,899
14,676 11.6% 37,576 13.3%
Mercer SuperTrust Shares A A AE 22,899 14,667 11.6% 37,566 14.3%
ANZ Growth A G G
22,899
14,513 11.5% 37,412 13.2%
ANZ Default Growth A G G 22,899 13,305 10.7% 36,205 12.7%
Mercer High Growth A A A 22,899 13,078 10.5% 35,977 12.6%
Aon Russell LifePoints 2045 A G A
22,899
13,068 10.5% 35,968 12.1%
ANZ OneAnswer Int'l Share A A IE 22,899 13,039 10.5% 35,938 12.7%
Mercer SuperTrust High Growth A A A 22,899 12,998 10.5% 35,898 12.7%
ASB Growth A G G 22,899 12,378 10.0% 35,278 11.7%
Fisher Funds Growth A A A
22,899
12,156 9.9% 35,055 10.6%
Westpac Growth A G G 22,899 11,632 9.5% 34,531 11.0%
Staples Rodway Growth A G G 22,899 11,034 9.1% 33,934 10.3%
AMP Aggressive A A A 22,899 10,859 8.9% 33,759 10.6%
SmartKiwi Growth A A AE 22,899 10,518 8.7% 33,417 12.1%
AMP Growth A G G 22,899 10,269 8.5% 33,168 9.9%
Fisher Funds Two Equity A A IE
22,899
10,253 8.5% 33,153 11.0%
Grosvenor High Growth A A A 22,899 9,104 7.6% 32,003 9.9%
---------------
Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition
A = Aggressive, AE = Australasian Equities, G = GrowthIE = International Equities, P = Property

For those funds that have not been going for the full period (April 2008 to December 2014) the results are shown below. In this group Generate Focused Growth has been the standout performer followed by Grosvenor International Share and Amanah KiwiSaver Plan. Both Generate and Amanah are relative newcomers to the KiwiSaver universe and are yet to prove themselves over the long-term. However, the short term data shows some promise.

Aggressive Funds      
Cumulative
contributions
(EE, ER, Govt)
+ Cum net gains
after all tax, fees
Effective
cum return
= Ending value
in your account
Effective
last 3 yr
return % p.a.
since April 2008 X Y Z
to March 2015      
$
% p.a.
$
                 
ANZ OneAnswerSustainable Growth A A IE
22,290
8,070 7.4% 30,361 10.0%
Grosvenor Geared Growth A A A 18,626 8,482 10.1% 27,108 11.0%
Craigs Equity A A A 17,952 6,412 8.2% 24,364 9.3%
Lifestages Growth A A   17,073 5,708 11.9% 22,781 8.9%
Grosvenor International Share A A IE 15,612 7,408 11.9% 23,021 11.8%
Grosvenor Socially Responsible A A AE 15,612 5,433 8.7% 21,045 8.0%
Grosvenor Trans-Tasman Small Companies A A AE 15,612 1,958 2.1% 17,571 0.1%
Craigs NZ Equity A A AE 13,849 6,049 11.8% 19,898 11.2%
Craigs Australian Equity A A AE 13,849 4,061 7.7% 17,909 8.1%
Generate Focused Growth A A A 6,287 2,016 10.7% 8,303
n/a
Amanah KiwiSaver Plan A A   3,083 1,422 13.7%
4,505
n/a
---------------                
Column X is interest.co.nz definition, column Y is Sorted's definition, column Z is Morningstar's definition
A = Aggressive, AE = Australasian Equities, G = GrowthIE = International Equities, P = Property

There are wide variances in returns since April 2008, and even in the past three years, and these should cause investors to review their KiwiSaver accounts especially if their funds are in the bottom third of the table.

For explanations about how we calculate our 'regular savings returns' and how we classify funds, see here and here.

The right fund type for you will depend on your tolerance for risk and importantly on your life stage. You should move only with appropriate advice and for a substantial reason.

Our March reviews of the Conservative & Default funds, Moderate funds, Balanced funds and Growth funds can be found here, here, here and here.

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?

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Reins??rains, reigns?, off to the Concise Oxford with you lot

Thanks. You are right, we missed that one.