The Financial Markets Authority says over half of the KiwiSaver funds it is tracking had negative returns in the year to March.
The FMA’s online KiwiSaver tracker tool has been updated with the quarterly fund information for March 2020.
And the FMA says the latest information reflects "the volatility that hit markets in the first quarter of the year" as a result of the onset of the Covid-19 pandemic. (It is worth noting, of course that globally and locally stock markets have rallied strongly since March, so, many of these losses will have been reversed.)
"There are now around 270 KiwiSaver funds and, of those, 143 had negative returns for the year to end of March 2020," the FMA says.
It says funds in the higher risk ‘growth’ and ‘aggressive’ categories were hit hardest by the Covid-19 market falls: 92 of these funds went into negative territory, while 18 funds in this risk profile were positive for the year to March 2020.
In the ‘balanced’ fund category, 39 funds were negative for one year returns, while 16 funds were positive.
"As expected, the conservative and defensive funds were mostly positive, however 12 funds in these categories were negative over the one year period," the FMA says.
A total of 109 funds had positive returns after fees for the year to March.
Of these, however, 25 funds lost 50% or more of their gross return to fees.
"The FMA encourages members to look at the fees as well as the investment performance of their fund. Returns were strong and markets were rising up to February this year, so the amounts paid in fees could have been less noticeable," the FMA says.
The FMA tracker allows comparisons over both a five-year and one-year period. The five-year period shows that over 99% of funds were positive from April 2015 – March 2020. Comparing funds over a five year period provides a longer term perspective of investing though periods of volatility.
The tracker presents publicly disclosed data analysed by the FMA, to enable investors to see how much of their funds’ investment performance was absorbed by fees. There is a range of information taken from KiwiSaver providers’ quarterly fund updates, to help people compare and contrast different funds.
"It is expected that data for the next quarter, ending 30 June, will show the rebound that has happened in the markets, beginning in early April," the FMA says.