A fund owned by the Commonwealth Bank of Australia (CBA) has captured over 10 per cent of the net NZ$226 million to have flowed into the KiwiSaver retirement savings system since last October.
The flows into KiwiSaver products proved to be the only bright spot in another abysmal quarter for the New Zealand retail managed funds industry, which dropped by over NZ$413 million in the three months to December 31 last year. According to the New Zealand Stock Exchange-owned research house FundSource, the KiwiSaver sector was the only retail investment structure which experienced positive flows over the quarter. Of the 10 managers FundSource surveyed, ING topped the KiwiSaver rankings with flows of NZ$61.12 million over the quarter closely followed by the Commonwealth Bank-owned Auckland Savings Bank (ASB), which garnered more than NZ$51 million. Rounding out the top five were: BT/Westpac (NZ$27.22 million); AMP (NZ$26.66 million); and, Axa (NZ$25 million). Auckland-based boutique manager Fisher Funds also showed up well, capturing $4.4 million. While ING topped the overall rankings, the CBA-owned ASB KiwiSaver Conservative Fund was the most successful individual product, winning over 10 per cent of the total flows with just under NZ$30 million. The majority of the top 10 KiwiSaver products fit the conservative mould. But despite the strong contribution from the KiwiSaver funds the 2007 calendar year was the worst since the 12 months to June 2001 with NZ$1.1 billion net retail fund outflows. The KiwiSaver scheme officially launched on July 1 last year but money did not begin flowing into provider accounts until October. Over 400,000 New Zealanders have signed up to a KiwiSaver provider with more than 40 schemes to choose from. According to the results of a Mercer NZ survey released this week, as KiwiSaver develops it will bring New Zealand’s retirement aspirations more in line with Australia. The survey found New Zealanders were much more likely than Australians to retire past the age of 65 and were also considerably more reliant on the government pension to fund their golden years. Bernie O’Brien, head of Mercer NZ, said in a statement: “KiwiSaver has had a strong launch and, if Australian habits are a guide, has enormous potential to transform New Zealand’s retirement landscape. “Given the early groundswell of support for KiwiSaver and the Australian experience, it is reasonable to make some conservative predictions. In the future, as KiwiSaver evolves, New Zealanders will be more confident in their ability to retire earlier and will expect a greater level of comfort in retirement.”
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
