Passive approach pays off for Simplicity's KiwiSaver investors

But active manager Milford Asset Management continues to produce superior returns over the longer term.

Simplicity's KiwiSaver growth fund was the best performer of 15 growth funds in the June quarter with a 1.6% return and it ranked second over a one-year and three-year timeframe with annual returns of 13.3% and 4.6% respectively, according to the latest MJW survey.

But Milford's KiwiSaver active growth fund was the best performer over three, five and 10 year periods with annualised returns of 5.7%, 9.3% and 10.5% respectively.

In the June quarter, the Milford active growth fund ranked 13th with a negative 0.7% return and it was eighth for the year with an 11.7% return.

The worst performing growth fund in the June quarter was ANZ's with a negative 1.5% return and it also ranked 15th over one and three years with returns of 6.7% and 1.5% respectively.

MJW says its survey covers the largest 17 KiwiSaver schemes by assets under management at March 31, 2023 and that these schemes account for about 95% of KiwiSaver assets under management at that date.

Simplicity's balanced fund returned 1.3% in the June quarter, the best return out of 17 funds.

It was second-placed over one-year with a 10.7% return but fell to fourth place over three years with an annualised return of 2.8% and to fifth place over five years with an annualised return of 5.6%.

Milford's KiwiSaver balanced fund was best performer over three, five and 10 years with annualised returns of 4.3%, 7.1% and 8.7% respectively, but ranked 11th of the 17 for the June quarter with an 0.3% return.

ANZ's KiwiSaver balanced growth fund was the worst performer of the 17 balanced funds over the June quarter with a negative 1.2% return and its one-year return ranked 15th with a 6.3% return.

Another ANZ fund just called its balanced fund ranked 16th over the quarter and 17th over the year.

BNZ's first-home buyer KiwiSaver fund ranked first among 18 conservative funds in the June quarter with a 1.1% return but was 12th over the year with a 6.8% return, while ANZ's was the worst performing conservative fund with zero return over the June quarter and last over the year with a 5.4% return.

Simplicity's default fund was the best performer in the latest quarter with a 1.2% return, second over the year with a 10.6% return and first over a two year period with an annualised 10.1% return.

The worst performing default fund was Fisher's KiwiWealth fund with a negative 0.1% return in the quarter, and worst of the six with an 8.2% return over one year. Over two years, it was fifth out of the six with an 8.8% return.

Fisher's pre-existing KiwiWealth conservative fund, however, ranked first over one, three and five-year periods with returns of 7.7%, 2.5% and 3.5% respectively, despite ranking 15th out of 18 funds in the June quarter with an 0.3% return.