A revival in the performance of the New Zealand share market in the September quarter and flat international share markets meant KiwiSaver funds with a high allocation to global equities lost ground, according to the latest survey of managed funds by consulting actuaries Melville Jessup Weaver.

This hurt Generate's and KiwiWealth's growth KiwiSaver funds, which chalked up the biggest returns in the previous quarter, relegating them to worst and second-worst performers in the latest quarter, largely because they have such high allocations to international shares.

It put Milford's growth KiwiSaver fund back in first place in all periods from three months out to 10 years. Its return in the latest three months was 2.7% and its average annual return over five years was 14.5%.

Milford's growth fund has a 35.2% weighting of NZ shares and a 29% weighting of international shares. KiwiWealth's, by contrast, has just a 6.5% weighting to NZ shares and a 71.9% weighting to international shares, and Generates is 22.5% to NZ shares and 47.1% to international shares.

Best all-rounder

Milford's balanced and conservative KiwiSaver funds also have the distinction of being the best performers across all periods, although the latter hasn't been going for 10 years yet.

The worst performing KiwiSaver growth fund in most periods was AMP's $921m fund, which produced a 0.3% return in the latest quarter and averaged 9.5% over 10 years. 

The KiwiWealth return for the latest quarter was 0.3%, although it ranked second with a 12.3% annual return over 10 years. Generate's fund hasn't been going that long but it ranked fifth with annual returns of 11% over five years – Milford's return over five years was 12.2%.

KiwiWealth's growth KiwiSaver fund has $2.29 billion in funds invested, Generate's has $1.14b and Milford's has $2.81b.

The largest KiwiSaver growth fund, ASB Bank's $4.6b fund, ranked 10th in the quarter with a 0.8% return and fifth over 10-years with an 11.2% annual return. 

The second-largest is ANZ's with $4.28b and a quarterly return of 1.1%, putting it seventh for the quarter, and a 10-year return of 12.3%, putting it in third place.

Most KiwiSaver funds of all types produced positive returns in the latest quarter with KiwiWealth's $974m conservative fund being the worst performer with a negative 0.7% return and its $361m default fund produced a negative 0.6% return.

Downunder shares

Harbour Asset Management, which doesn't provide KiwiSaver funds, had the best performing wholesale NZ and Australian shares fund in the latest quarter with an 8.3% return from $625m in the fund, although Fisher Funds Management's $325m NZ growth fund performed best over every period from one to 10 years with 27.6% and 20.9% returns respectively.

Salt Funds Management's wholesale $104m dividend appreciation fund was the worst performing NZ shares fund in the latest quarter with a 3.8% return but it ranked sixth over 10 years with annual returns of 17.1%.

Fisher had the best wholesale Australian shares fund in all periods with a 7.2% return in the September quarter and a 14% annual return over 10 years – that fund has $367m in it.

All the NZ and Australian share funds had positive returns in the latest quarter with the sole exception of AMP Capital's $314m Australian share fund which produced a negative 1.1% return, although over 10 years the annual return was positive 8.6%.

The best-performing Australasian listed property fund over most periods was ANZ Investment Management's $1.02b trans-Tasman fund with a 4.1% return in the latest quarter and a 15.5% annual return over 10 years.

Global negatives

Nikko Asset Management's $44m NZ property fund was the best performer over five years with annual returns of 11.7% but was second in the latest quarter with 4% and fifth over 10 years with 13.7% annual returns.

Quite a lot of the global share funds produced negative returns, although many, such as ANZ's $590m Northern Trust/Vanguard fund, incidentally the best performer among the core global funds category with a 2% quarterly return, are farmed out to other international managers.

ANZ appointed Northern Trust as its new sub-manager for two of its global share funds in October 2020 and another such fund previously managed by Vanguard.

ANZ's $9.04b international equities fund ranked sixth in the latest quarter with a 1.2% return.

But reinforcing the point that looking at the latest quarterly result isn't a good basis on which to choose a manager, Fisher's $1.03b international select equities fund was one of the worst performers in the September quarter with a negative 0.9% return. However, it was the best performing global growth shares fund over the year ended September with a 31.2% return.

Disclaimer: non-executive Milford director Brian Gaynor is also BusinessDesk's largest shareholder