Q4 triage for last year’s KiwiSaver carnage

The New Zealand equity market gained positive ground for the fourth quarter and the S&P/NZX 50 Index returned 3.7% in Morningstar’s KiwiSaver December quarter survey.

Top contributors were Fisher & Paykel Healthcare,  a2 Milk, and Ebos Group, returning 23.1%, 20.6%, and 16.7%, respectively.

Across the Tasman the S&P/ASX 200 index increased 3.2% over the December quarter, driven mainly by the materials and financials sector where top performers were BHP Group (11.75%), Westpac (9.6%), and Commonwealth Bank of Australia (6.7%).

In local property, REITs measured by the S&P/NZX All Real Estate Index lost 22.3% over the one-year period and 3.6% over the last quarter. Despite the Australia REITs market returning 5.2% over the December quarter, the S&P/ASX 200 A-REIT had a loss of 19.7% over one year.

Morningstar global fund data director Greg Bunkall says all multisector KiwiSaver funds produced positive returns for the quarter with average returns ranging from 1.3% for conservatives to 3.0% for aggressive schemes.

The Q4 figures, which are after fees but before tax and take into account associated tax credits, show MAS KiwiSaver schemes leading in performance across a range of categories. Top performers against their peer group includes QuayStreet Income 1.9% (multisector conservative), MAS Moderate 2.6% (multisector moderate), MAS Balanced 3.6% (multisector balanced), MAS Growth 4.5% (multisector growth), and MAS Aggressive 5.0% (multisector aggressive).

In the multisector group, top performers for the year were QuayStreet Income -1.7 % (multisector conservative), Milford -5.3% (multisector moderate), InvestNow Castle Point 5 OCNS -3.5% (multisector balanced), Milford Active Growth -7.9% (multisector growth), and SuperLife High Growth -12.7 (multisector aggressive).

At the extreme ends for all peer groupings,  the highest 12 month performance was a return of 18.8% for SuperLife Aust Res in Australasian equity peer group, while reflecting the thrashing taken by tech stocks, the lowest was Nikko AM ARK at -63.3% in the international shares group.

Bunkall says default options appointed in 2021 had a rough year - SuperLife KiwiSaver Default (-10.6%), Westpac KiwiSaver Default Balanced (-10.8%), and Booster KiwiSaver Default Saver (-12.1%) in 2022.

In long term results, over 10 years, the aggressive category average has given investors an annualised return of 8.4%, followed by growth (8.1%), balanced (6.4%), moderate (4.1%), and conservative (4.2%).

The three leading providers; ANZ, ASB and Westpac retain their positions of first, second, and third respectively but all declined in market share last year and have done so steadily since 2019.  ANZ leads at 20.5% (AUM $17.7 billion) down from 21.4% in 2021, ASB is in second position, has market share of 15.9% (AUM $13.7 billion) down from 16.1% in 2021, and Westpac holds third spot with 10.6% market share (AUM $9.16 billion) down from 10.7%.  Fisher Funds sits in fourth spot with Kiwi Wealth taking fifth.

Meanwhile Milford in sixth place has climbed one place each year since 2019 when it sat in ninth place. The six largest KiwiSaver providers account for approximately 69% of assets on our database.