Here's why you should ignore this KiwiSaver report

Friday, 27 July 2018

Morningstar spokesman Chris Douglas urged investors not to place much emphasis on past returns.

The author of a KiwiSaver performance report says the best thing that many investors could do is ignore its findings.

Morningstar has released its KiwiSaver survey to June 30, showing the performance of the saving scheme's various funds.

It shows returns bounced back in the quarter after a difficult first three months of 2018.

'Australian and New Zealand equities led the way, while the falling New Zealand dollar helped ensure solid global equity returns. As a result, those KiwiSaver investors in the Balanced and Growth-orientated schemes had the strongest returns,' said Morningstar director of manager research ratings Asia-Pacific Chris Douglas.

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Top performers among their peer group in the quarter were ANZ Default KiwiSaver Scheme Conservative, Generate KiwiSaver Conservative Fund, Summer Investment Selection, Generate KiwiSaver Growth Fund and Booster KiwiSaver Geared Growth.

Over a longer period, Milford Active Growth, Milford KiwiSaver Balanced, Fisher Funds KiwiSaver Growth, Aon Russell Lifepoints, and ANZ KiwiSaver have been the top-performing options in their respective categories.

Douglas said there was nothing particular that those higher-performing providers were doing that was setting them apart. 'They are all very different with different biases in there.'

ANZ took a steady, long-term approach, he said, while Milford was very active and would move its asset allocation to where the firm saw the best opportunities.

Fisher Funds and Milford had been helped by their exposure to New Zealand equities.

But he said the average KiwiSaver member should put very little store in these sorts of surveys.

Instead, they should choose a provider they were comfortable with, who communicated well, make sure they were in the right fund for their risk profile and were paying fees they were comfortable with.

'Then ignore past performance. It can tell you a story but at the same time it leads investors to make the wrong decision at the wrong time.'

KiwiSaver assets on the Morningstar database grew to $48.8 billion at June 30.

ANZ is still the largest provider. The top six KiwiSaver providers have more than 80 per cent of the market.