KiwiSaver assets continue their rebound

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A Morningstar survey shows KiwiSaver assets increased to $98 billion at the end of the second quarter.
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KiwiSaver funds have continued their rebound as global markets stage a recovery.

The latest survey from investment firm Morningstar, shows KiwiSaver assets increased to $98 billion at the end of the second quarter, compared to $91.9b in the previous quarter.

All multisector KiwiSaver funds delivered positive returns over the June quarter, with the average returns ranging from 1.2 percent in conservative funds, to 5.4 percent in aggressive.

ANZ led the market share with more than $19.6b in assets, followed by ASB, BT (Westpac) and Fisher Funds.

Morningstar director of data Greg Bunkall said markets had been performing strongly since Christmas and conditions were expected to keep improving.

“Asset prices typically look forward rather than backwards,” he said.

“The price you pay for the bonds and stocks that you want today are typically driven by what investors see in the future. So they’re obviously seeing through the turbulence in the economy right now, but predicting better earnings for companies going forward.”

Further increases in interest rates remained the biggest risk to KiwiSaver funds, Bunkall said.

“If inflation doesn’t get under control and if central banks think that interest rates need to keep rising, then that’ll put pressure on KiwiSaver balances,” he said.

Morningstar said long term returns over the past decade averaged from 8.7 percent for aggressive funds, 8.3 percent for growth, 6.6 percent for balanced, 4.6 percent for moderate and 4.2 percent for conservative.

Top performers over the quarter against their competitors included Kiwi Wealth Default Conservative in the conservative category, QuayStreet Socially Responsible Investment fund in the balanced category, QuayStreet Growth in the growth category and Generate Focused Growth in aggressive.