Strong three years for KiwiSaver members, as new player takes top spot

Photo: Unsplash Warnings of impending share market doom didn't play out in 2025, and the year ended with solid returns for KiwiSaver investors - and some change at the top of the performance tables. Actuarial firm MJW has released its latest investment survey for the December quarter, which shows most funds, both within KiwiSaver and outside the scheme, had a small but positive return in the three months and solid performance over a longer period. It said the median KiwiSaver balanced fund returned 1.7 percent for the quarter, after costs and before tax, and 9.8 percent for ther year. "This caps a particularly healthy three-year period with the median growth, balanced and conservative KiwiSaver funds returning 13.3 percent, 10.9 percent and 7.4 percent per annum respectively." MJW principal Ben Trollip said developed markets equities were a big driver of results. "In local currency terms, the MSCI World Index rose 3.4 percent over the quarter. While US markets did well, stronger performance came from Japan, up 12 percent, and the UK, up 6.2 percent. Emerging markets were led by India which rose 6.2 percent." The New Zealand dollar weakened compared to most currencies which meant that the returns were better in unhedged terms. Trollip said although a lot of the noise in the year was about the performance of the US tech giants - such as Nvidia - the MSCI Emerging Index, which tracks companies in countries such as China, Brazil, Taiwan and India, had returned 30 percent, compared to 20 percent for the Nasdaq over 2025. In KiwiSaver, Simplicity was first in growth, conservative and balanced funds for the quarter. Over a year, Westpac was first in the growth and balanced categories, with 12.8 percent and 11 percent respectively, and AMP was first in moderate, with 9.5 percent. ASB was first among conservative funds, with 7.6 percent. Over three years, Simplicity was first in the growth funds, with returns of 15.7 percent a year, ASB first in balanced, with 12.6 percent, AMP first in moderate with 10.9 percent in its moderate/balanced fund and ASB first in conservative with 8 percent. Over 10 years, Milford was first in growth, with 10.2 percent, and balanced, with 8.1 percent a year, AMP was first in moderate with 5.8 percent and Milford was first in conservative with returns of 5.1 percent a year. Trollip said the survey only assessed the largest KiwiSaver providers. It did not include new entrant Sharesies, which said it had received 10 percent of all scheme transfers in October. "In global markets, for example, there was a bit of a sell-off from memory in around November, and then things rebounded," Trollip said. "Also, in a similar vein, New Zealand interest rates fell quite sharply on the back of a weak GDP number, and then have subsequently risen back. So there was a bit of a down and then back up again over the three-month period. "But zooming out, it was a pretty solid year and capping a solid three-year period." He said the returns over three years were more than many people would expect. He said it was noticeable that Simplicity had topped the growth category, whereas providers that had traditionally been strong, such as Generate and Milford, had a weaker quarter. Simplicity could have been helped by its global allocation being higher than others in the growth category, he said. "I think the other thing that might have helped them is that their New Zealand fixed interest - I think that's where they put their home loans, things like that. With interest rates moving around it was a bad quarter for traditional New Zealand fixed interest but Simplicity's allocation to home loans and the like might have been what drove their better performance relative to their peers." But he said there could be a lot of movement in three-month periods, and it was better to take a longer view. He said Milford's active growth fund, which has been a long-term top performer, had grown from $3.3 billion in December 2022 to $8.5b. Trollip said it was noticeable that five or 10 years ago, New Zealand shares were outperforming global equities. But that had not been the case for the last three to five years. "And New Zealand equities still have been less volatile than global equities, but they haven't given you much of a return boost. "In fact, they've been quite a drag on performance. So, one of the things I've been contemplating with potentially the New Zealand economy turning around low interest rates and all that, is the sector poised for a rebound or not? But it's very hard to pick the timing of that, I think." The report said Indeed, over the long term New Zealand equities had brought useful diversification from global equity markets with little give-up in return. "Add to that the fact that local investors may have an advantage in picking (and monitoring) good active managers, and may have a tax advantage, and the case for a home bias feels somewhat stronger despite the poor recent run from...

Strong three years for KiwiSaver members, as new player takes top spot

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