Low-Fee Simplicity Out-Performs Rivals’ Funds

Over 80% of KiwiSaver Growth Funds Reverse as Low-Fee Simplicity Out-Performs Rivals’ Funds

It’s been a bumpy few months for global markets with October’s correction, the emergence of a bear market and general volatility. KiwiSaver fund performance data from 1 June to 30 November 2018 confirms the effects of a volatile market that may be here to stay.

Christopher Walsh, a senior researcher at MoneyHub, commented:
“Global markets have recently been fairly brutal to KiwiSaver funds, and whether it’s the start of a bear market remains to be seen as 2018 comes to an end. New Zealanders have been spooked by the fall in their KiwiSaver funds and the fear is well-placed, with one fund falling close to 2% over six months”.

“The three worst performing funds belonged to AMP KiwiSaver, with their Nikko AM Growth, ANZ Growth and LS Growth Fund moving down 1.98%, 1.54% and 1.29% in the period respectively”.

“In the last six months, only 4 of the 27 KiwiSaver growth funds made a return of over 0%. The low-cost index-tracking Simplicity Growth Fund was the best performer with a 0.62% return. Booster’s KiwiSaver Balanced Growth came in second with a 0.47% return.

“Whatever each fund is doing, the performance is well off the recent up-and-up results New Zealanders got used to. Worryingly, the next six months are going to be uncertain given the fears around trade tensions between the USA and China, low-growth global economic data and a US Federal Reserve continuing to increase interest rates”.

“As we leave 2018 one thing is clear – the markets are a bit of a mess, and this directly exposes any KiwiSaver growth fund to volatility. First at risk is anyone considering using their KiwiSaver balance for a first-home deposit. It may be an idea to think about which fund they want to be in – any more negative returns could affect an individual’s housing affordability if their savings continue to shrink”.

As part of an increased commitment to KiwiSaver, MoneyHub’s research team will continue to record and track monthly KiwiSaver fund prices to better inform New Zealanders.
More details: MoneyHub

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