KiwiSaver still as popular as ever

Nearly half of private investors have now joined KiwiSaver with a further 22% intending to join in the next quarter, a survey from ING says.

Well over half of private New Zealand investors will be KiwiSavers by June, according to results from the recent ING Investor Dashboard Sentiment survey. As of March, 49% of high net worth New Zealand investors had joined, and a further 22% said they intended to join.

This figure is up from 15% who indicated they intended to join last quarter. This popularity of KiwiSaver is consistent with a FundSource report released yesterday, showing that KiwiSaver net funds under management, which reached $2.27 billion in March 2009, now represent about 15% of the total FundSource reported retail net funds under management, currently standing at $15.31 billion.

ING head of KiwiSaver distribution, David Boyle says, “The changes to the scheme introduced by the government this month will potentially encourage more people to join, even during the economic downturn. Since people are now feeling less willing to spend and more willing to start saving. Lowering the minimum contribution rate to 2% may well regenerate interest from those who previously saw the 4% contribution level as a barrier�.

However, FundSource also reported that the majority of people enrolled in KiwiSaver have their contributions allocated to conservative funds, purely because most people are in default schemes which automatically select conservative funds.

The ING KiwiSaver (default scheme) numbers are consistent with this, with 96% of investors in the conservative fund.

“Conservative funds may well be the best option for the older KiwiSaver and for the naturally cautious investor, especially during times of market turmoil. However, over the average duration of lifetime savings of 20 years, conservative funds have not historically delivered the best returns available. Ultimately, conservative funds may not provide the level of savings people would require to live well in retirement,â€? Boyle says.

“In the case of KiwiSaver, the investment remains locked in until members reach superannuation age of 65, so for those people at the beginning or in the middle of their working life there is a long way to go before they reach retirement. Unfortunately, if an investor selects a growth fund early and does not change this later, then if there is a large downward price movement and the investor is closer to retirement, the losses have a greater impact. This is exactly why ING includes the Lifetimes option for KiwiSavers so that as you move closer to retirement your contributions are allocated into more conservative and cash preservation funds.�

The Lifetimes Option places investors in a fund according to their age, and then moves investors as they reach milestone birthdays. This choice is designed to deliver the appropriate level of growth for an investor’s savings according to his or her age, thereby protecting and building investors’ savings over the average 20 year investment term.

Although the popularity of the scheme continues to exceed expectations, with more than one million New Zealanders now enrolled, there still remains a good number of New Zealanders yet to enrol with KiwiSaver. Only 27% of people under 65 who are eligible have joined the scheme.

“This is a good time to join KiwiSaver since the current benefits of the scheme – the government $1,000 kick-start, the members’ tax credit and 2% employer contributions – all add significantly to your own salary contributions. For those who are already enrolled now is also a good time to talk to an adviser about the composition of your fund,� adds Boyle. “The first million member mark was reached well ahead of schedule.

“I’m very pleased that New Zealanders are readily adopting a savings habit for retirement. KiwiSaver is transforming the nation’s attitude to savings and the investor landscape. While the scheme has proved far more popular than anticipated, there is still a long way to go before everyone who is eligible to take advantage of the scheme has actually enrolled.�

KiwiSaver Performance Survey results table

Use these quick links to take you directly to a section on the table.

Default Options
Multisector
- Conservative
- Moderate
- Balanced
- Growth
- Aggressive
Single Sector Options
- Cash
- Fixed Income
- Property
- Australasian Equity
- International Equity
- Miscellaneous

KiwiSaver Performance Survey – Returns to 31 March 2009
Default Options	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver Default Fund	AMP	0.36	-1.45	1.91
ASB KiwiSaver Conservative Fund (Default)	ASB	-1.16	-0.28	1.44
AXA KiwiSaver Income Plus	AXA	-0.81	-1.48	-2.19
ING KiwiSaver – Conservative Fund	ING	-1.47	-0.66	0.67
TOWER KiwiPlan-Cash Enhanced	Tower	-0.83	-1.93	-0.48
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Multisector Options
Conservative	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver Default Fund	AMP	0.36	-1.45	1.91
ANZ KiwiSaver – Conservative Fund	ING	-1.55	-1.50	0.34
ASB FirstChoice KiwiSaver Tracker Conserv Fund	ASB	-1.16	-0.13	1.51
ASB KiwiSaver Conservative Fund (Default)	ASB	-1.16	-0.28	1.44
Asteron KiwiSaver Conservative Fund	Asteron	-3.84	-3.94	-3.72
AXA KiwiSaver Income Plus	AXA	-0.81	-1.48	-2.19
Fidelity KiwiSaver-Capital Guaranteed Kiwi	Fidelity	0.16	0.26	-
Fidelity KiwiSaver-Conservative Kiwi Fund	Fidelity	-2.10	-3.40	-0.60
ING KiwiSaver – Conservative Fund	ING	-1.47	-0.66	0.67
ING KiwiSaver SIL Conservative Fund	ING	-1.47	-1.32	0.55
National Bank KiwiSaver – Conservative	ING	-1.54	-1.48	0.35
Smartshares Smartkiwi Conservative Fund	NZX	0.32	-1.50	0.78
TOWER KiwiPlan-Cash Enhanced	Tower	-0.83	-1.93	-0.48
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Moderate	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver Conservative Fund	AMP	-0.01	1.45	6.17
AMP KiwiSaver Moderate Fund	AMP	-0.59	-4.47	-1.52
ANZ KiwiSaver – Conservative Balanced Fund	ING	-2.80	-5.74	-5.40
ASB FirstChoice KiwiSaver Active Conservative Fund	ASB	-1.62	-3.31	-3.60
ASB FirstChoice KiwiSaver Tracker Moderate Fund	ASB	-4.23	-8.43	-9.01
ASB KiwiSaver Moderate Fund	ASB	-4.22	-8.37	-8.61
AXA KiwiSaver Conservative	AXA	-1.15	-2.06	-
Huljich Conservative Diversified KiwiSaver Fund	Huljich	-1.33	5.83	7.39
ING KiwiSaver – Conservative Balanced	ING	-2.79	-4.26	-4.66
ING KiwiSaver SIL Conservative Balanced Fund	ING	-2.67	-5.55	-5.23
National Bank KiwiSaver – Conservative Balanced	ING	-2.82	-5.73	-5.44
Smartshares Smartkiwi Balanced Fund	NZX	-3.73	-12.74	-14.68
TOWER KiwiPlan-Conservative	Tower	-2.12	-5.25	-5.84
Westpac KiwiSaver-Conservative Fund	Westpac	-1.38	-1.76	-0.88
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Balanced	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver – TYNDALL Balanced Fund	Tyndall	-1.96	-12.81	-13.32
AMP KiwiSaver Balanced Fund	AMP	-1.36	-9.89	-9.14
AMP KiwiSaver-ING Balanced Fund	AMP	-2.66	-13.71	-12.88
AMP KiwiSaver Moderate Balanced Fund	AMP	-1.18	-8.32	-6.86
AMP KiwiSaver-TOWER Balanced Fund	AMP	-1.04	-9.27	-10.16
ANZ KiwiSaver – Balanced Fund	ING	-3.79	-9.32	-10.51
ASB FirstChoice KiwiSaver Active Balanced Fund	ASB	-4.01	-10.91	-14.27
ASB FirstChoice KiwiSaver Tracker Balanced Fund	ASB	-5.92	-13.76	-16.35
ASB KiwiSaver Balanced Fund	ASB	-5.91	-14.05	-16.24
Asteron KiwiSaver Balanced Fund	Asteron	-2.25	-9.58	-11.29
AXA KiwiSaver Balanced	AXA	-3.51	-10.64	-16.17
Brook Professional KiwiSaver Scheme Balanced Fund	Brook	-0.14	-2.71	-1.71
Fidelity KiwiSaver-Balanced Kiwi Fund	Fidelity	-4.67	-6.13	-4.49
Fidelity KiwiSaver-Ethical Kiwi	Fidelity	-3.03	-10.89	-
Huljich Balanced Diversified KiwiSaver Fund	Huljich	-1.06	1.82	-1.40
ING KiwiSaver – Balanced	ING	-3.91	-7.63	-9.97
ING KiwiSaver SIL Balanced Fund	ING	-3.62	-8.95	-10.15
National Bank KiwiSaver – Balanced	ING	-3.78	-9.23	-10.40
TOWER KiwiPlan-Balanced	Tower	-4.71	-10.14	-13.26
Westpac KiwiSaver-Balanced Fund	Westpac	-3.72	-6.96	-9.32
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Growth	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver Growth Fund	AMP	-2.32	-17.05	-18.11
ANZ KiwiSaver – Balanced Growth Fund	ING	-4.92	-13.09	-15.69
ANZ KiwiSaver – Growth Fund	ING	-5.82	-16.59	-20.66
ASB FirstChoice KiwiSaver Active Growth Fund	ASB	-4.96	-13.99	-19.09
ASB FirstChoice KiwiSaver Tracker Growth Fund	ASB	-7.52	-19.15	-23.37
ASB KiwiSaver Growth Fund	ASB	-7.51	-19.15	-22.98
Asteron KiwiSaver Balanced Growth Fund	Asteron	-1.90	-15.65	-18.74
Fidelity KiwiSaver-Growth Kiwi Fund	Fidelity	-6.81	-12.27	-12.85
Huljich Growth Diversified KiwiSaver Fund	Huljich	-1.08	1.67	-3.68
ING KiwiSaver – Balanced Growth	ING	-5.02	-10.87	-14.86
ING KiwiSaver – Growth Fund	ING	-6.19	-14.25	-19.71
ING KiwiSaver SIL Balanced Growth Fund	ING	-4.74	-12.76	-15.42
ING KiwiSaver SIL Growth Fund	ING	-5.61	-16.30	-20.36
National Bank KiwiSaver – Balanced Growth	ING	-4.87	-13.10	-15.74
National Bank KiwiSaver – Growth	ING	-5.91	-16.70	-20.73
Westpac KiwiSaver-Growth Fund	Westpac	-4.52	-9.82	-13.54
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Aggressive	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver Aggressive Fund	AMP	-2.92	-20.64	-22.71
AXA KiwiSaver Growth	AXA	-5.66	-16.88	-24.18
Brook Professional KiwiSaver Scheme Growth Fund	Brook	-0.80	-5.53	-6.30
Fidelity KiwiSaver-Aggressive Kiwi Fund	Fidelity	-2.14	-15.01	-14.75
First NZ Capital KiwiSaver Scheme	FNZC	-2.86	-19.06	-26.15
Fisher Funds Growth KiwiSaver Scheme	Fisher	2.89	-11.92	-16.04
TOWER KiwiPlan-Growth	Tower	-6.58	-17.02	-23.19
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Single Sector Options
Cash	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AMP KiwiSaver Cash Fund	AMP	1.25	3.44	8.06
ASB FirstChoice KiwiSaver NZ Cash Fund	ASB	1.00	2.87	7.31
ASB KiwiSaver NZ Bank Deposit Fund	ASB	1.00	2.87	7.26
Asteron KiwiSaver Capital Fund	Asteron	1.90	3.33	7.67
AXA KiwiSaver Cash	AXA	0.72	2.38	6.37
ING KiwiSaver – Cash Plus Fund	ING	1.10	2.91	7.24
ING KiwiSaver SIL Cash Plus Fund	ING	0.93	2.58	6.62
ANZ KiwiSaver Cash Fund	NZGT	1.04	2.76	-
National Bank KiwiSaver Cash Fund	NZGT	1.05	2.77	-
TOWER KiwiPlan-Preservation	Tower	1.13	3.02	7.36
Westpac KiwiSaver-Cash Fund	Westpac	0.92	2.33	5.95
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Fixed Income	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
Asteron KiwiSaver High Yield Fixed Interest Fund	Asteron	-4.81	-2.91	-2.33
ING KiwiSaver SIL New Zealand Fixed Interest Fund	ING	-1.83	-1.72	3.00
ING KiwiSaver SIL International Fixed Int Fund	ING	-0.01	7.34	11.09
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Property	Underlying Manager	3-month	6-month	1-year
Asteron KiwiSaver Global Property Fund	Asteron	-21.24	-52.32	-55.99
ING KiwiSaver SIL Australasian Property Fund	ING	-7.73	-20.08	-25.00
ING KiwiSaver SIL International Property Fund	ING	-26.13	-53.07	-58.26
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Australasian Equity	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
AonSaver AMT KiwiSaver Milford Aggressive Fund	Milford	2.03	3.61	6.74
Asteron KiwiSaver SRI Share Fund	Asteron	-3.95	-13.62	-22.83
Asteron KiwiSaver Trans-Tasman Small Companies Shr	Asteron	5.53	-20.19	-27.65
ING KiwiSaver SIL Australasian Share Fund	ING	-3.48	-12.82	-20.59
Smartshares Smartkiwi Growth Fund	NZX	-6.63	-21.82	-26.98
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International Equity	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
ASB FirstChoice KiwiSaver Active High Growth Fund	ASB	-9.43	-24.46	-
ASB FirstChoice KiwiSaver Global Sustainability Fd	ASB	-4.50	-9.30	-
Asteron KiwiSaver International Share Fund	Asteron	-5.34	-22.39	-25.26
ING KiwiSaver SIL International Share Fund	ING	-7.47	-16.64	-19.69
ING Kiwisaver SIL Sustainable Growth Fund	Super’tion Inv	-6.58	-16.42	-
TOWER KiwiPlan-Equity	Tower	-8.03	-21.41	-30.59
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Miscellaneous	Underlying Manager	3-month (%)	6-month (%)	1-year (%)
Fidelity KiwiSaver-Options Kiwi Fund	Fidelity	12.96	-13.52	-1.51
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Note: Mike Pero and NZF SuperKiwi KiwiSaver products are represented by the Huljich funds.
Estimated Total Ongoing Fee is the sum of the Management Fee, the Trustee Fee, and Administration Fees.

Kiwis recognise need to save for retirement

New Zealanders clearly recognise the need to save for retirement, despite the current economic conditions, with many believing they must supplement New Zealand Superannuation to enjoy the retirement they want, according to the latest AMP SuperWatch research.

In the survey, when asked if retirement income from the Government’s pension scheme, New Zealand Superannuation, is adequate, nearly three quarters say they require additional income from personal investments or savings to realise their aspirations.

Notwithstanding current economic conditions, New Zealanders continue to save for retirement. Of those who are saving, 58% say they are saving for retirement. This is significantly higher than levels in February 2007 but lower than the high of 65% reached a year ago.

Commenting on the survey, AMP Financial Services NZ managing director Jack Regan said the results reflect New Zealanders’ retirement expectations.

“For many, New Zealand Superannuation will not let them live the life they want in retirement. The additional savings intention, over and above NZ Super, reflects people’s expectations of a better retirement. This is a theme that has been consistently reflected throughout the history of the survey,“ he said.

Two thirds of those already in KiwiSaver do not intend to vary their contribution to the lower minimum contribution level of 2% effective from 1 April 2009. Of the 23% likely to reduce their contribution, a quarter will save the money elsewhere, 13% will use it to pay off debt and less than half will use the extra 2% to cover increased living costs.

“This reinforces people’s commitment to save to match their needs and aspirations for a better retirement. Despite these extraordinary times and the pressure on personal incomes, people continue to embrace retirement savings schemes,� Regan said.

According to the survey, KiwiSaver’s popularity continues, especially among younger people. Almost 40% of those saving for retirement have already joined KiwiSaver and a further 26% say they intend to join this year. Of those aged between 18 and 24 years more than a third intend to join.

For the first time, of those saving for retirement, more see KiwiSaver (51%) as a way to save for retirement than paying off their mortgage (49%) or bank deposits (43%).

The survey also shows, for the first time, the level of confidence people have in their decision to join KiwiSaver. Most are confident they made the right decision with nearly two thirds saying they are confident or very confident.

Regan says New Zealand’s preference for KiwiSaver as a retirement savings option is becoming clearer.

“People are less inclined to connect repaying their mortgage and having the retirement they want. More people are joining KiwiSaver and those already in the scheme don’t intend to reduce their contribution, despite the opportunity to do so. In people’s minds, KiwiSaver is becoming integral to a better retirement,� he said.

According to the survey, more people intend to work beyond the age of eligibility for New Zealand Superannuation. Only a quarter expect to retire before the age of 65, down significantly from 35% a year ago.

AMP has been surveying New Zealanders’ retirement saving attitudes and behaviours since 2000. AMP SuperWatch is currently undertaken twice a year.