KiwiSaver funds went backward for the first time in over a year in the June quarter, with negative returns across all fund types, according to Mercer’s latest KiwiSaver survey.
Since share markets bottomed out last March KiwiSaver funds have experienced strong returns, with growth funds rising rapidly after suffering big losses during the peak of the financial crisis in late 2008 and early 2009.
But as share markets struggle, growth funds are again leading the way down; the median KiwiSaver growth fund fell 6.1% in the June quarter, cutting the return of growth funds down to 10.4% in the last year.
The top performer in this category in the last quarter was the Grosvenor Balanced Growth fund, returning 0.4%.
Fisher Funds Growth fund has achieved the highest return over the past year at 18.1%.
Balanced funds dropped by a median 3.2% in the June quarter but were still up 9.7% over the past year.
ASB Moderate fund, down 2.2%, achieved the best result in the quarter while the Mercer Balanced Fund returned 13.7% over the year.
Conservative funds dropped 0.8% in the quarter, headed by Asteron Conservative with a 0.2% return, but returned 8.3% for the year, led by the Mercer Super Trust Conservative fund at 12.1%.
Default funds edged down 0.2% in the quarter and were up 7.4% for the year, led in both timeframes by the Mercer KiwiSaver Conservative fund, which returned 0.7% in the quarter and 12.3% in the last year.
Mercer New Zealand boss Martin Lewington said global sharemarket volatility had stalled the run of positive KiwiSaver fund returns achieved over the past year.
“Stock markets, which had risen strongly for the past 12 months and fuelled the run of positive returns for KiwiSaver, went into reverse during the past quarter as fears over European sovereign debt default sparked concern about the outlook for the euro and the global economic recovery.
“In particular funds with the highest allocation to growth assets (shares and property) felt the impact most severely,” Mr Lewington said.
The “choppiness” in the markets could continue for some time, “but we’re not expecting a repeat of the economic slowdown of 2008,” he said.
“We believe we are still heading in the direction of recovery, even if it is at a slow pace. Therefore shares and property still have a place in KiwiSaver funds.”
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Big swings in Orion Health's share price ahead of key earnings announcement today
- TechDay and NetGuide publisher settles with liquidators, creditors left $2m short
- PM defends MPI as criticism over myrtle rust spread mounts
- NBR Rich List family unable to settle dispute over $264k
- MARKET CLOSE: NZ shares fall in light holiday trading
Most listened to
- Lawyer Adina Thorn discusses her decision to launch a class action against Carter Holt Harvey over its Shadowclad product
- Westpac senior economist Satish Ranchhod says student inflows continue to be a big driver of growth
- Spark chief executive Simon Moutter says getting in tune with your market is a major benefit from diversity
- Nevil Gibson reveals rising life expectancy rates could increase pension costs even higher
- NBR Radio: best of the week ended May 26, with Grant Walker