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KiwiSaver Performance - Morningstar Survey June Quarter 2013

Since the launch of KiwiSaver 6 (Yes SIX) years ago, Moneyworks have monitored the performance of the core KiwiSaver providers every quarter.  We only monitor the Balanced funds, and compare the returns to each other and build up a track record of how the funds have gone compared to each other.

Our goal is to monitor the funds that we have recommended to our clients, but also to watch for CONSISTENCY of performance.  We aren't interested in fund managers that have a really high return for a few quarters, and then fall down to the bottom of the rankings.  We are after fund managers that are always in the top half.

One of the main funds that we have recommended to clients is the SIL KiwiSaver Balanced fund - offered by OnePath (who are owned by ANZ Bank.)  This fund has been the outstanding performer since the launch of KiwiSaver, consistently performing in the top quartile of the rankings that we monitor.

Over time, the funds covered have changed.  There are a number of providers that have merged with others (this quarter, it is National Bank merging with ANZ, last quarter, AXA disappeared when it merged with AMP.)  Future changes that we know are going to happen - Tower has sold it's KiwiSaver to Fisher, and Fidelity have sold their KiwiSaver to Grosvenor.  However, there are new players entering the market, but we don't monitor them until they have been going for at least 12 months, preferably 3 years.

In the Morningstar KiwiSaver survey, we note that the Milford Balanced Fund has been the star performer for the last 12 months.  However, it is important to note that the underlying allocations or investments in the fund can make quite a difference to the performance over a short period of time.  The Milford KiwiSaver fund holds 55.5% of it's investments in New Zealand domiciled assets.  This means that there has been a reduced impact from the fact that the New Zealand dollar has increased in value (particularly when compared to the Australian dollar) over the last three months.  This compares with the SIL Balanced fund, which only has 34.9% in New Zealand domiciled assets.

But, there are swings and roundabouts.  Your goal as an investor is to make sure that your KiwiSaver investment reflects your risk profile and risk tolerance, and that you don't chop and change on a regular basis.  Your other goal should be to have your fund consistently performing so that it is ranked in the top HALF of similar funds every quarter.

Check out the KiwiSaverSurvey_here, or at the Morningstar website.

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