KiwiSaver provider performance during Covid
Read on to find out some of the top performers
Up until the recent market turbulence most KiwiSavers had enjoyed a long period of strong returns and few had experienced a significant fall in their balances. In fact, the 12 month period leading up to March 2020 had seen average 12 month investment returns after fees of almost 30% for some top performing High Growth Funds.
The arrival of Covid-19 and the initial disruption the pandemic caused to investment markets saw significant falls in KiwiSaver balances particularly in Balanced, Growth and High Growth funds. While this was unsettling. most of my clients took heed of advice not to panic and have since experienced significant recoveries in their KiwiSaver balances.
One of the best tests for KiwiSaver providers is how well they perform against others during a falling market to minimise losses for their clients. The March 2020 quarter KiwiSaver results published by independent research firms Morningstar and FundSource give us a good picture of which providers have performed the best. Among the top KiwiSaver providers both Booster and Generate feature prominently.
In the High Growth (Aggressive) fund category, Booster funds held 1st, 3rd and 4th place for investment returns after fees over the past 12 months while Generate held 2nd place. Performance results were very similar over 3 year and 5 year time frames.
In the Growth fund category, Generate placed 5th for the past 12 months and 1st over 3 years. Booster also performed strongly in 6th place out of more than 28 providers.
In the Balanced category, Booster had 2 funds in the top 10 including 2nd place over 12 months and 1st place over 3 years. Generate does not offer a Balanced fund but its Conservative fund was 3rd best for investment returns over 12 months, and 1st over 3 years and 5 years.
Perhaps the biggest talking point has been the success of Socially Responsible Funds (sometimes called Ethical Funds) led by Booster. Boosters Socially Responsible Growth fund was the top performer over 1 year and 5 years in its category, while Booster’s Socially Responsible Balanced Fund was 2nd over 1 year and 1st over 3 years. Please let me know if you are interested in these great performing Socially Responsible Fund options.
It is difficult to predict accurately what will happen to markets in the shorter term but most financial commentators are predicting more volatility (up and down) before markets return to more consistent growth trends in the medium to longer term.