kiwisaver, investing

Best Performing KiwiSaver Funds - Mar 2020

  • Fabook Messenger Sharing Link

Since the 2008 financial crisis and the onset of the Great Recession, a growing chorus of voices has urged major economies and investors to move away from “Quarterly Capitalism” and a myopic view of investing towards a true long-term mindset. 

This perspective has become even more prevalent in the wake of the COVID-19 pandemic. The downturn has caused many global share markets  to fall by more than 30% from their mid-February highs. KiwiSaver funds were no exception as they are not immune to underlying market weaknesses.

During these times many investors may be tempted to remove their investments from the markets, while others begin to dabble in investments that boost short-term returns. However, emotional trading due to market volatilities tends to hamstring investment returns.

Riding out temporary market downswings is one of the signs of a good investor. This is even more important when it comes to long-term investments, such as KiwiSaver. Long-term investments need time to over come short-term volatility to make bigger gains over a longer period of time. 

To help our readers, National Capital has researched the KiwiSaver market and have come up with top-performing KiwiSaver Funds based on their 5-year returns in each category below. This data is derived from the quarterly Morningstar Survey of March 2020

Conservative Fund Category: Milford Conservative Fund (Five Year Returns: 5%). 

Milford Conservative Fund Objective 

Milford KiwiSaver Conservative Fund’s objective is to provide moderate returns and protect capital after the base fund fee* but before tax over the minimum recommended investment timeframe which is 3 years.  It is a diversified fund that primarily invests in fixed interest securities, with a moderate allocation to equities.

Fund's Net Returns vs Morningstar Conservative Index

The chart below compares the after fees and before-tax returns of the Fund to Morningstar’s New Zealand Multi-Sector Conservative Index. Over the past 5 years, the net return for the Fund is 5%, compared to the Morningstar index 5-year return of 4.20%. The Morningstar data calculates returns post fees but before tax.  

Milford vs  Morningstar NZ Multi-Sector Conservative Index

Screen Shot 2020-05-08 at 11.49.55

Furthermore, let us take a look at the asset allocation data that shows you where Milfords Fund Manager has invested their investor’s money. This allocation can make a big difference to the volatility, risk and returns generated which becomes even more important to know during the current volatile times. Thus, it is important for investors to know what the asset allocation of their fund is.  

Asset Allocation Detailed Breakdown

As of March 2020, the Fund’s target asset allocation was as follows:

Screen Shot 2020-05-08 at 11.50.11

Fees Compared to Industry

FEES

MILFORD  CONSERVATIVE  FUND

PEER GROUP - CONSERVATIVE FUND

Total Annual Fund Fees

0.95%

0.72%

+ Membership Fee (annual)

$36.00

$27.00


Moderate Fund Category:
Generate Conservative Fund (Five Year Returns: 5.4%). 

Generate Conservative Fund Objective 

The objective of the Generate Conservative Fund is to provide a conservative investment return through investment in a portfolio of actively managed cash, fixed interest, property and infrastructure* assets, Australasian equities and international equities. Volatility is likely to be the lowest of between the Generate KiwiSaver Scheme funds. Long-term returns are likely to be the lowest of these Funds as well due to the lowest weighting of growth assets.

Fund's Net Returns vs Morningstar Moderate Index

The chart below compares the after fees and before-tax returns of the Fund to Morningstar’s New Zealand Multi-Sector Moderate Index. Over the past 5 years, the net return for the Fund is 5.40%, compared to the Morningstar index 5-year return of 5.20%. The Morningstar data calculates returns post fees but before tax.  

Generate vs Morningstar NZ Multi-Sector Moderate Index

Screen Shot 2020-05-08 at 11.50.34

Asset Allocation Detailed Breakdown

As of March 2020, the Fund’s target asset allocation was as follows:

Screen Shot 2020-05-08 at 11.50.46

Fees Compared to Industry

FEES

GENERATE  CONSERVATIVE  FUND

PEER GROUP - MODERATE FUND

Total Annual Fund Fees

1.25%

0.92%

+ Membership Fee (annual)

$36.00

$27.72

 

Balanced Fund Category: Milford Balanced Fund (Five Year Returns: 6.2%). 

Milford Balanced Fund Objective 

Milford KiwiSaver Balanced Fund’s objective is to provide capital growth after the base fund fee but before tax and before the performance fee over the minimum recommended

investment timeframe which is 5 years. It is a diversified fund that primarily invests in equities, with a significant allocation to fixed interest securities. 

Fund's Net Returns vs Morningstar Balanced Index

The chart below compares the after fees and before-tax returns of the Fund to Morningstar’s New Zealand Multi-Sector Balanced Index. Over the past 5 years, the net return for the Fund is 6.20%, compared to the Morningstar index 5-year return of 6.20%. The Morningstar data calculates returns post fees but before tax. 

Milford vs Morningstar NZ Multi-Sector Balanced Index

Screen Shot 2020-05-08 at 11.51.02

Asset Allocation Detailed Breakdown

As of March 2020, the Fund’s target asset allocation was as follows:

Screen Shot 2020-05-08 at 11.51.12

Fees Compared to Industry

FEES

MILFORD  BALANCED  FUND

PEER GROUP - BALANCED FUND

Total Annual Fund Fees

1.29%

1.10%

+ Membership Fee (annual)

$36.00

$28.44

 

Growth Fund Category: Milford Active Growth Fund (Five Year Returns: 7.3%). 

Milford Active Growth Fund Objective

The Milford Active Growth Fund’s objective is to provide annual returns of 10% after the base fund fee but before tax and before the performance fee, over the minimum

recommended investment timeframe which is five years. It is a diversified fund that primarily invests in equities, with a moderate allocation to fixed interest securities.

Fund's Net Returns vs Morningstar Growth Index

The chart below compares the after fees and before-tax returns of the Fund to Morningstar’s New Zealand Multi-Sector Growth Index. Over the past 5 years, the net return for the Fund is 7.30%, compared to the Morningstar index 5-year return of 6.80%. The Morningstar data calculates returns post fees but before tax.  

Milford vs Morningstar NZ Multi-Sector Growth Index

Screen Shot 2020-05-08 at 11.51.27

Asset Allocation Detailed Breakdown

As of March 2020, the Fund’s target asset allocation was as follows:

Screen Shot 2020-05-08 at 11.51.36

Fees Compared to Industry

FEES

MILFORD  ACTIVE GROWTH  FUND

PEER GROUP - GROWTH FUND

Total Annual Fund Fees

1.06%

1.19%

+ Membership Fee (annual)

$36.00

$25.50

 

Aggressive Fund Category: Booster SRI Growth Fund (Five Year Returns: 7.5%). 

Booster SRI Growth Fund Objective

The fund’s objective is to maximise the potential for capital gains over the long term. It aims to achieve returns (after fees but before tax) of at least 4.5% per year above inflation over any ten year period. There will be significant movements up and down in the value of the fund. The fund invests predominantly in growth assets, with little or no income assets. It currently excludes investments in directly held companies and managed fund investments where the underlying activities are principally involved in the tobacco, alcohol, gambling, armaments, nuclear power, adult entertainment, GMO and fossil fuel industries. The criteria for screening out these investments may be modified over time to reflect developments in the socially responsible investment arena. 

Fund's Net Returns vs Morningstar Aggressive Index

The chart below compares the after fees and before-tax returns of the Fund to Morningstar’s New Zealand Multi-Sector Aggressive Index. Over the past 5 years, the net return for the Fund is 7.50%, compared to the Morningstar index 5-year return of 7.30%. The Morningstar data calculates returns post fees but before tax.  

Booster SRI vs Morningstar NZ Multi-Sector Aggressive Index

Screen Shot 2020-05-08 at 11.51.50

Asset Allocation Detailed Breakdown

As of March 2020, the Fund’s target asset allocation was as follows:

Screen Shot 2020-05-08 at 11.52.01

Fees Compared to Industry

FEES

BOOSTER SRI GROWTH FUND

PEER GROUP - AGGRESSIVE FUND

Total Annual Fund Fees

1.33%

1.54%

+ Membership Fee (annual)

$36.00

$36.00

 

How to choose?

Fund performance is only one of the many factors that need to be considered when choosing a KiwiSaver fund. While analysing past performance is a helpful metric to evaluate investment options, a major downfall of this comparison is that past performance does not guarantee future performance. Other factors such as ethical concerns (ESG), fees, customer service, asset allocation and alignment to one's personal situation all play an important role when deciding which which KiwiSaver fund to invest in. 

National Capital can help you choose the right KiwiSaver investment. We provide a KiwiSaver HealthCheck which takes into consideration the big picture and not just the scorecard! 

  • Fabook Messenger Sharing Link
How does your KiwiSaver Fund compare? Take the KiwiSaver HealthCheck now
START HEALTHCHECK

You may also like

3 factors in choosing a KiwiSaver fund

In our previous posts, we showed you how we calculate what lumpsum you need at retirement, what rate of return you need from..

How much do I need to contribute?

We hear a lot about how different KiwiSaver funds are performing, who is the best, who is the worst. There is also a lot of..

How much return do I need from my KiwiSaver account?

In our last post we showed you how to find the amount you need as a lump sum at retirement. Finding that goal is half the..

What KiwiSaver lump sum do you need at retirement?

Retirement. For some of us it may be very close, for others, it might still be 10 years away. But the question we all need to..

What is KiwiSaver?

When most Kiwis turn 65 they are entitled to the NZ superannuation which is a pension that is paid fortnightly. However, the..

Why we only work with KiwiSaver providers who pay us

At National Capital, our mission is to help 1 million Kiwis become financially secure. To achieve this, our first step is..

Subscribe