Top five KiwiSaver providers continue market share jostle

Morningstar’s 2024 Q2 survey of 21 KiwiSaver providers comparing 296 products, estimates annual fee revenue for the quarter at $869 million, up from $779m in the past 12 months, with a projected annual fee revenue of 0.78%. The five largest KiwiSaver providers accounted for approximately 68% of AUM and generated around 69% of the fees.

With 18.7% of the market, ANZ continued to lead with more than $20.7b AUM but was down from 20.2% for the same quarter last year. The biggest of the four banks also topped estimated fee revenue  of $169.8m.

Fisher Funds and ASB pulled into the next two spots in almost a dead heat with 15.1% market share on assets of $16.8b each. Due to rounding Morningstar placed Fisher second and ASB in third place. Fisher outdid ASB for fee revenue with $160.1m compared to $100.3m.

Westpac took the next biggest slice of the market, 10% ($11b AUM), but was relatively low on the fee table - eighth place at $50.3m. Meanwhile Milford with 8.9% market share ($89.6b) came in third with fee revenue of $102.2m.

Across the market average multisector category returns ranged between 0.3 – 0.8% indicating incremental gains for most funds. Many multi sector KiwiSaver funds provided positive returns over the June quarter and many produced negative returns with funds that contained risk assets struggling the most, says Morningstar director of global data Greg Bunkall.

Of the default funds Simplicity and Superlife delivered the best returns (1.2% each) of the quarter, to boost solid annual numbers (10.6% for Simplicity and 10% for SuperLife). Most of the default funds punched out 10% returns for the year, with the notable exception of Fisher Funds on 8.3%.

As with Q1, Quay Street continued to perform well across many time periods in the conservative and balanced categories. Milford delivered consistently high performance within the moderate, balanced and growth categories over the long term, albeit struggling a little recently. Generate showed strong numbers across many time periods.

For conservative funds, BNZ First Home Buyer Fund topped the quarter for the first time with 1.1% annual returns. In the moderate category Pie Conservative had the best performance delivering 1.2%. Pathfinder Balanced Fund topped the balanced category at 1.9% and did it again for the growth category with 2.1%. In the aggressive category Kernel High Growth came in first with 1.9% returns.

For single sector funds, SuperLife NZ Cash delivered the best returns of the quarter with 2%, while for fixed interest Nikko AM Scheme NZ Corporate Bonds came top with 1.1% performance. Kernel S&P Global 100 NZD Hdg topped international shares with 8.9% (top across all fund categories).

The highest 12 month performance for this quarter was 98.4% from koura Carbon Neutral Cryptocurrency, while the lowest was -30.6% from koura Clean Energy. For the quarter, Kernel S&P Global 100 NZD Hedged came in top with 8.9% returns, while koura Carbon Neutral delivered -15.3% at the bottom of the spectrum.

Over 10 years, the aggressive category average has given investors an annualised return of 9.1%, followed by growth (8.2%), balanced (6.7%), moderate (4.7%), and conservative (4.3%).

While the overall tone for Q1 was cautious optimism,Q2 was a period of cautious navigation for investors, says Bunkall.

Global growth was tempered by ongoing domestic challenges. The equity markets delivered moderate gains, mainly through international exposures, while fixed income provided some stability amidst fluctuating yields.

The weakening NZ dollar underscored the importance of currency diversity in investment portfolios. Bunkall says while it was great to be unhedged in the previous quarter, it could be the opposite next quarter and a fully hedged position might have been preferable.

Turning to the current quarter’s volatility, Bunkall says at this stage it doesn’t really point to any growth or decline in growth in AUM over the next quarter.