KiwiSaver

An industry body argues the biggest risk to KiwiSaver is over-zealous regulation, rather than fund manager behaviour.

WSNZ chief executive Bruce Kerr says the industry body was monitoring “how sweeping the changes will be”.

Under proposed changes announced by Commerce Minister Simon Power late in April, all KiwiSaver providers would have to adhere to the same rules applied to default schemes – in particular the requirements for more regular reporting and stronger trustee oversight.

Kerr said while the organisation supported the broad thrust of proposed KiwiSaver changes but it was opposed to “regulation that simply adds compliance cost for no member value”.

“We believe there is currently no systemic problem with KiwiSaver. In fact in our view, the biggest risk KiwiSaver faces is that overly zealous regulation is rolled out without adequate and effective engagement with all stakeholders to ensure those changes will be optimal.”

He said, for example, many existing employer superannuation schemes and master trusts continued to operate effectively under current regulatory arrangements and could face unnecessary disruption if the proposed new regime was extended to incorporate them.

While Power has excluded non-retail KiwiSaver schemes and other employer-based savings schemes from the proposed changes, he said that decision could be revisited later.

According to Kerr, the Ministry of Economic Development (MED) has indicated the KiwiSaver changes will be included in a new piece of legislation expected to be drafted by August.

“Initially, we thought the changes would be part of the Securities law review.”

WSNZ, which has about 130 representing about 90% of the industry, was also drafting a “high level policy” document for presentation at its conference to be held at the end of August in Christchurch.

Kerr said the policy was unlikely to include a view on the banning of commissions on KiwiSaver products.

“But we’re certainly starting to have conversations about [commissions],” he said.

 

KiwiSaver funds provided positive returns for the fourth straight quarter, though the growth is running out of steam and ongoing fears of a debt crisis in the euro zone may be partly to blame, according to Mercer (NZ) Limited.

The median return for the most conservative Default Funds was 2% in the three months ended March 31, according to Mercer’s KiwiSaver survey.

The median for conservative funds was 2.1%, balanced funds chalked up 2.9% and growth funds managed 3.3%. 

“While KiwiSaver funds have posted positive returns over the last four quarters, performance has reached a plateau and we’re not seeing the same level of growth achieved over the last six months,” said Mark Lewington, head of Mercer New Zealand. 

While growth in global markets and better-than-expected corporate earnings have underpinned returns, “growing concerns over possible sovereign debt defaults in the euro zone could threaten the run of positive returns,” he said.

“The volatility is far from over.”

Some US$3.7 trillion was wiped off the value of global equity markets last week, according to Bloomberg, on fears Greece’s debt crisis would spread. Equity markets rallied again in Asia today after governments in the euro zone agreed to lend as much as 750 billion euros to member states drowning under their debt burdens. 

Fidelity Life’s Aggressive fund turned in the best result, with a 6.3% return in the first quarter, while Fisher Funds Growth Fund recorded the fattest return for the 12 months through March, at 50.8%.  

Growth in funds under management for the top seven default funds grew by almost $1 billion between June 2009 and March 31, bringing the total held between them to $2.2 billion.

The latest KiwiSaver Performance Survey results from Morningstar.

 

KiwiSaver Performance Survey – Returns to 31 March 2010
Default Options	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver (Default) Fund	1.04	2.93	7.50	4.67
ASB KiwiSaver Conservative Fund (Default)	2.05	3.32	9.89	5.58
AXA KiwiSaver Income Plus (Default)	2.24	4.07	14.15	5.67
ING KiwiSaver – Conservative Fund (Default)	1.93	3.40	9.97	5.21
Mercer KiwiSaver Conservative (Default)	2.83	4.66	17.63	6.60
TOWER KiwiPlan-Cash Enhanced (Default)	1.77	3.44	10.51	4.87
Multisector Options
Conservative	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver (Default) Fund	1.04	2.93	7.50	4.67
ANZ KiwiSaver – Conservative Fund	1.98	3.79	10.35	5.23
Aon KiwiSaver Russell Lifepoints Cnsrv	3.19	6.20	20.66	6.52
ASB FirstChoice KiwiSaver Tracker Conserv Fund	2.05	3.31	9.86	5.61
ASB KiwiSaver Conservative Fund (Default)	2.05	3.32	9.89	5.58
Asteron KiwiSaver Conservative Fund	2.09	4.31	11.95	4.53
AXA KiwiSaver Income Plus (Default)	2.24	4.07	14.15	5.67
Fidelity KiwiSaver-Capital Guaranteed Kiwi	1.48	2.62	6.48	–
Fidelity KiwiSaver-Conservative Kiwi Fund	3.08	5.31	13.44	5.93
Fisher Funds Conservative KiwiSaver Fund	0.38	0.74	–	–
Gareth Morgan Kiwisaver Scheme Conservative Fund	1.66	3.15	6.37	4.95
Grosvenor KiwiSaver Enhanced Income Fund	1.27	2.61	4.80	5.96
ING KiwiSaver – Conservative Fund (Default)	1.93	3.40	9.97	5.21
ING KiwiSaver SIL Conservative Fund	2.03	3.82	10.50	5.41
Mercer KiwiSaver Conservative (Default)	2.83	4.66	17.63	6.60
National Bank KiwiSaver – Conservative	1.99	3.82	10.48	5.29
Smartshares Smartkiwi Conservative Fund	0.71	2.75	7.50	4.09
TOWER KiwiPlan-Cash Enhanced (Default)	1.77	3.44	10.51	4.87
Average	1.88	3.57	10.71	5.38
Moderate	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver Conservative Fund	1.44	3.67	7.75	6.95
AMP KiwiSaver Moderate Fund	1.38	4.16	10.27	4.21
ANZ KiwiSaver – Conservative Balanced Fund	2.39	4.84	15.12	4.36
Aon KiwiSaver Russell Lifepoints 2015	3.14	6.80	24.81	5.04
Aon KiwiSaver Russell Lifepoints Mod	3.16	7.06	26.12	4.34
ASB FirstChoice KiwiSaver Active Conservative Fund	2.53	4.17	15.73	5.62
ASB FirstChoice KiwiSaver Tracker Moderate Fund	2.87	4.79	17.92	3.58
ASB KiwiSaver Moderate Fund	2.88	4.80	17.90	3.80
AXA KiwiSaver Conservative	2.50	4.63	15.85	–
Grosvenor KiwiSaver Conservative Fund	2.43	3.85	12.80	5.99
Huljich Conservative Diversified KiwiSaver Fund	-1.49	-0.69	11.90	9.62
ING KiwiSaver – Conservative Balanced	2.06	3.84	13.49	4.02
ING KiwiSaver SIL Conservative Balanced Fund	2.48	4.92	15.40	4.58
Mercer Super Trust KiwiSaver Conservative	2.72	4.49	19.73	4.74
National Bank KiwiSaver – Conservative Balanced	2.40	4.82	15.13	4.34
Smartshares Smartkiwi Balanced Fund	0.11	4.06	20.81	1.53
TOWER KiwiPlan-Conservative	3.00	5.12	16.46	4.72
Westpac KiwiSaver-Conservative Fund	1.90	3.64	10.72	4.76
Average	2.11	4.39	16.00	4.54
Balanced	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver Balanced Fund	1.26	4.91	14.55	2.02
AMP KiwiSaver Moderate Balanced Fund	1.33	4.66	12.89	2.54
AMP KiwiSaver-TOWER Balanced Fund	3.33	6.55	18.17	3.04
ANZ KiwiSaver – Balanced Fund	2.75	5.76	19.53	3.43
Aon KiwiSaver ING Balanced	3.34	7.13	26.94	6.08
Aon KiwiSaver Russell Lifepoints 2025	3.13	7.65	29.54	2.24
Aon KiwiSaver Russell Lifepoints Bal	3.06	7.89	31.51	1.65
ASB FirstChoice KiwiSaver Active Balanced Fund	3.16	5.58	23.12	2.74
ASB FirstChoice KiwiSaver Tracker Balanced Fund	3.52	6.05	24.21	1.93
ASB KiwiSaver Balanced Fund	3.51	6.07	24.15	1.97
Asteron KiwiSaver Balanced Fund	2.65	5.68	21.52	3.83
AXA KiwiSaver Balanced	2.93	6.61	27.73	3.48
Brook Professional KiwiSaver Scheme Balanced Fund	2.20	4.78	12.78	5.28
Fidelity KiwiSaver-Balanced Kiwi Fund	3.67	6.13	18.69	6.23
Fidelity KiwiSaver-Ethical Kiwi	3.04	5.16	17.74	–
Forsyth Barr KiwiSaver Balanced Port	1.59	3.85	14.57	–
Gareth Morgan Kiwisaver Scheme Balanced Fund	1.80	3.96	7.99	2.08
Grosvenor KiwiSaver Balanced Fund	2.97	4.96	19.32	5.34
Huljich Balanced Diversified KiwiSaver Fund	-3.26	-2.60	13.52	5.80
ING KiwiSaver – Balanced	2.29	4.39	17.00	2.63
ING KiwiSaver SIL Balanced Fund	2.85	5.87	19.81	3.75
Mercer KiwiSaver Balanced	3.38	5.69	29.23	2.03
Mercer Super Trust KiwiSaver Active Balanced	3.38	5.68	28.94	2.01
Mercer Super Trust KiwiSaver Moderate	3.66	6.02	24.70	5.46
National Bank KiwiSaver – Balanced	2.78	5.75	19.50	3.48
TOWER KiwiPlan-Balanced	3.80	6.89	22.29	3.00
Westpac KiwiSaver-Balanced Fund	2.68	5.77	18.61	3.71
Average	2.62	5.44	20.69	3.33
Growth	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver-ING SIL Balanced Fund	2.23	7.36	22.03	3.11
AMP KiwiSaver Growth Fund	1.23	5.70	18.16	-1.64
AMP KiwiSaver – TYNDALL Balanced Fund	3.04	5.95	20.16	2.05
ANZ KiwiSaver – Balanced Growth Fund	3.15	6.69	24.27	2.36
ANZ KiwiSaver – Growth Fund	3.45	7.62	28.90	1.13
Aon KiwiSaver Russell Lifepoints 2035	3.11	8.28	33.28	-0.03
Aon KiwiSaver Russell Lifepoints Growth	3.09	8.44	34.39	-0.46
Aon KiwiSaver Tyndall Balanced	2.90	6.16	19.70	2.88
ASB FirstChoice KiwiSaver Active Growth Fund	3.49	6.32	27.42	1.54
ASB FirstChoice KiwiSaver Tracker Growth Fund	4.05	7.20	30.17	-0.12
ASB KiwiSaver Growth Fund	4.05	7.21	30.11	0.10
Asteron KiwiSaver Balanced Growth Fund	2.99	7.03	29.08	2.41
Fidelity KiwiSaver-Growth Kiwi Fund	4.12	6.42	24.12	3.66
Forsyth Barr KiwiSaver Growth Portfolio	1.49	4.04	18.25	–
Gareth Morgan Kiwisaver Scheme Growth Fund	2.78	4.60	8.30	-2.10
Huljich Growth Diversified KiwiSaver Fund	-5.32	-4.70	13.46	4.54
ING KiwiSaver – Balanced Growth	2.43	4.88	20.64	1.35
ING KiwiSaver – Growth Fund	2.56	5.32	24.20	-0.14
ING KiwiSaver SIL Balanced Growth Fund	3.17	6.80	24.59	2.65
ING KiwiSaver SIL Growth Fund	3.47	7.69	29.13	1.41
Mercer Super Trust KiwiSaver Growth	3.26	5.61	30.16	0.46
National Bank KiwiSaver – Balanced Growth	3.19	6.72	24.23	2.31
National Bank KiwiSaver – Growth	3.46	7.61	28.73	1.02
Staples Rodway KiwiSaver Balanced Fund	2.68	0.80	22.28	-0.18
Staples Rodway KiwiSaver Growth Fund	3.89	5.38	20.71	1.70
Westpac KiwiSaver-Growth Fund	2.53	5.98	21.52	2.50
Average	2.71	5.81	24.15	1.17
Aggressive	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver Aggressive Fund	1.18	6.22	20.78	-3.38
Aon KiwiSaver Russell Lifepoints 2045	3.07	8.86	37.29	-2.45
AXA KiwiSaver Growth	2.95	7.51	35.12	1.22
Brook Professional KiwiSaver Scheme Growth Fund	3.15	7.12	21.01	6.48
Fidelity KiwiSaver-Aggressive Kiwi Fund	6.30	9.17	33.03	6.21
First NZ Capital KiwiSaver Scheme	3.50	6.16	19.79	-5.94
Fisher Funds Growth KiwiSaver Fund	3.95	9.09	49.31	11.97
Grosvenor KiwiSaver Geared Growth Fund	4.69	7.71	–	–
Grosvenor KiwiSaver High Growth Fund	4.53	7.05	29.66	1.61
Mercer KiwiSaver High Growth	3.46	6.07	35.35	-1.57
Mercer Super Trust KiwiSaver High Growth	3.39	5.96	34.91	-1.68
TOWER KiwiPlan-Growth	4.38	8.38	31.42	0.47
Westpac KiwiSaver – Capital Protection Plan (1)	3.29	7.75	28.21	–
Average	3.68	7.47	31.32	1.18
Single Sector Options
Cash	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
AMP KiwiSaver Cash Fund	0.88	1.83	3.80	5.91
ANZ KiwiSaver Cash Fund	0.48	1.00	2.14	–
Aon KiwiSaver ING Cash	0.51	1.11	1.86	–
Aon KiwiSaver Tyndall Cash	0.73	1.47	2.93	5.42
ASB FirstChoice KiwiSaver NZ Cash Fund	0.56	1.16	2.48	4.87
ASB KiwiSaver NZ Bank Deposit Fund	0.56	1.17	2.50	4.85
Asteron KiwiSaver Capital Fund	0.70	1.43	3.25	5.44
AXA KiwiSaver Cash	0.86	1.90	4.40	5.38
ING KiwiSaver – Cash Plus Fund	0.58	1.15	2.50	4.84
ING KiwiSaver SIL Cash Plus Fund	0.43	0.85	1.93	4.25
Mercer KiwiSaver Cash	1.25	2.17	4.01	5.89
Mercer Super Trust KiwiSaver Cash	0.91	1.84	3.50	5.61
National Bank KiwiSaver Cash Fund	0.50	1.02	2.17	–
Staples Rodway KiwiSaver Conservative Fund	0.79	1.62	2.70	4.33
TOWER KiwiPlan-Preservation	0.74	1.55	3.20	5.26
Westpac KiwiSaver-Cash Fund	0.67	1.40	3.15	4.54
Fixed Income	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
Asteron KiwiSaver High Yield Fixed Interest Fund	2.15	5.08	9.07	4.86
ING KiwiSaver SIL New Zealand Fixed Interest Fund	2.68	4.77	7.94	5.44
ING KiwiSaver SIL International Fixed Int Fund	1.48	1.90	4.04	7.51
Mercer Super Trust KiwiSaver Fixed Interest	3.94	5.98	20.76	10.01
Property	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
Asteron KiwiSaver Global Property Fund	6.01	9.20	65.43	-14.67
ING KiwiSaver SIL Australasian Property Fund	-3.16	-0.86	20.73	-4.84
ING KiwiSaver SIL International Property Fund	6.97	14.29	81.22	-13.03
Mercer Super Trust KiwiSaver Property	3.19	6.87	64.28	-6.34
Australasian Equity	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
Aon KiwiSaver Milford	–	–	–	–
Aon KiwiSaver Milford Aggressive Fund	2.79	7.40	22.88	14.53
Asteron KiwiSaver SRI Share Fund	1.96	4.19	29.62	0.48
Asteron KiwiSaver Trans-Tasman Small Companies Shr	3.16	9.82	58.03	6.93
ING KiwiSaver SIL Australasian Share Fund	0.97	4.28	25.65	-0.11
Mercer Super Trust KiwiSaver Trans-Tasman Shares	0.80	3.44	24.51	0.98
Mercer Super Trust KiwiSaver Shares	3.82	6.49	33.96	-3.61
Smartshares Smartkiwi Growth Fund	-0.46	5.29	32.44	-1.66
International Equity	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
ASB FirstChoice KiwiSaver Active High Growth Fund	4.09	7.67	30.63	–
ASB FirstChoice KiwiSaver Global Sustainability Fd	6.17	10.03	31.09	–
Asteron KiwiSaver International Share Fund	3.34	7.21	23.32	-4.00
ING KiwiSaver SIL International Share Fund	5.78	10.84	26.02	0.60
ING Kiwisaver SIL Sustainable Growth Fund	3.41	7.71	19.35	–
Mercer Super Trust KiwiSaver Global Shares	5.05	7.66	37.50	-6.09
TOWER KiwiPlan-Equity	5.35	11.12	36.30	-2.73
Miscellaneous	3-month (%)	6-month (%)	1-year (%)	2-year (%pa)
Fidelity KiwiSaver-Options Kiwi Fund	8.04	12.53	32.81	14.38

NB: Returns are before tax and after the fees deducted from the funds unit price.

 

 

Asteron has closed its $33 million KiwiSaver fund and is recommending its 6200 investors transfer their money to the scheme run by Grosvenor

The closure of Asteron’s KiwiSaver scheme, flagged by Good Returns a fortnight ago, marks the third provider to shut up shop after the Australian-owned EoSaver and union fund IRIS folded two years ago.

Sean Carroll, Asteron managing director, said the firm has recommended its KiwiSaver members shift to Grosvenor because it has a similar funds profile to the Asteron scheme.

“Grosvenor also ensures KiwiSaver investors deal through advisers,” Carroll said.

He said under the terms of the deal, Asteron will receive a payment from Grosvenor for each KiwiSaver client transfer to help recover administration costs.

As well, Asteron members who make the shift to Grosvenor will be given a discounted administration fee for a period. Grosvenor will also pay a slightly higher trail commission to advisers than that offered by Asteron.

Asteron members have until May 31 to choose a new provider or they will be allocated to one of the six default KiwiSaver schemes.

Carroll said the decision to close the Asteron scheme was a “logical” one given the concentrated market.

“If you look at the KiwiSaver market, 95% of members are with the top seven providers,” he said. “That leaves 45 or so other providers fighting over 5% in a market with very slim margins. There will be further consolidation.”

According to Carroll, while the Asteron scheme, which has accumulated $33 million and about 6,200 clients since launching in 2007, wasn’t yet profitable but “we weren’t losing much money either”.

He said while Asteron remained supportive of KiwiSaver for New Zealand it would now focus on its core life insurance operations.

Asteron’s KiwiSaver money was largely managed by Tyndall Investment Management, which is owned by Asteron parent, Australian firm Suncorp.