QuayStreet KiwiSaver Scheme has pushed out Simplicity’s Growth Fund from the Top 5 spot with their growth fund.
QuayStreet has reached the top 5 Growth KiwiSaver Funds with the 5th best 5-year return at 6.8%, the 3rd best 3-year return at 5.8% and the best 1-year and 3-month return at -3.6% and -5.3%.
Simplicity’s KiwiSaver Growth Fund fell to 6th place for KiwiSaver Growth Funds at 6.7%, 5yr returns primarily influenced by the 1-year return of -11% and 3-month return of -10.2%. The average growth fund was down 9% this quarter. As an investor, there has been high volatility in the market. However, because KiwiSaver is a long-term investment, you can expect to mitigate the volatility in the future when the market stabilises.
The amount KiwiSavers have seen in unrealised returns from volatility in KiwiSaver funds reached just short of $5 billion in the three months to the end of June, Morningstar’s June quarter KiwiSaver report shows.
Global share and bond markets have experienced dramatic falls as interest rates and fears of recession rose in developed countries. Because KiwiSaver funds invest in a mix of shares, bonds, property and cash, their recent performance reflects the challenging market conditions experienced over the latest quarter.
The only KiwiSaver funds that showed small growth in the 12 months to the end of June were cash funds. However, the falls suffered by most KiwiSaver funds remained small compared to the gains investors have had over the past ten years. Even though the average growth fund suffered an after-fee loss of 10.6% in the 12 months to the end of June, the average 10-year return was a positive 9%, Morningstar figures showed.
It is most appropriate to evaluate the performance of a KiwiSaver scheme by studying its long-term returns and not fixating on the temporary short-term negative returns.
What does this mean for KiwiSaver Investors?
For Simplicity KiwiSaver Growth Fund Investors, this doesn’t mean you need to switch funds. Simplicity still ranks as the 6th best Growth Fund based on Average 5-year returns, and returns are not everything. As always with investing, past returns do not mean future returns; there is more that goes into picking the correct KiwiSaver fund than 5-year returns.
For QuayStreet KiwiSaver Investors, you will have had to endure less volatility by investing in the QuayStreet Growth Fund than most KiwiSaver Growth Funds.
Which KiwiSaver Fund you choose should suit your needs and help you reach your financial goals. To find the correct KiwiSaver Fund for your goals, whether a Conservative Fund or a Growth Fund, consider filling in the National Capital Healthcheck and finding the right fund and provider.
