Our comprehensive review of regular savings returns to september 30, 2016 for aggressive kiwisaver funds _ interest. co. nz

The smallest growth over and above our investors contributions and after accounting for tax and fees, was recorded by ANZ OneAnswer International Property Fund.

A common theme across the funds that added the greatest value was their greater exposure to Cash compared to some of their peers. Definition of functional currency The Cash holding is effectively reducing the risk in the portfolio and has provided some capital protection during what has been quite a volatile quarter. Fx exposure definition Exposures to Australasian shares continues to provide schemes with some return pickup.

A recent Melville Jessup Weaver (MJW) report has identified the Milford Active Growth Fund is delivering returns on an after fees, before tax basis, which are superior to a sample peer group and with less risk. Legal definition of currency (The MJW review is a point-to-point analysis, different to our regular savings approach.) In fact, the annualised volatility numbers are below two of the Balanced funds in the report. Currency definition economics This is a unique situation and defies what the text books say should be happening.

Hedging ratios across the category differ greatly and this will be influencing returns also. Us currency definition International Bond and Property portfolios are traditionally fully hedged back to NZ dollars to protect the income stream plus the hedging premium that is present.

QuayStreet NZ Equity Fund (formerly Craigs Investment Partners) is the best overall performer on a since inception of the fund basis. Currency exchange rate definition The Fund came to market at the beginning of the prolonged bull market period and has not experienced any of the severe sell-off that existed in 2007/2008.

A dispersion of returns across the various managers exists and those funds appearing at the bottom of the table are likely to remain there for some time as the funds above them are continuing to perform at higher levels.

We have observed the number of funds with three-year returns higher than long-run averages have fallen away. Definition of currency swap Last quarter approximately half of the main table were ahead on a three year basis, this quarter it is 30%.

ANZ OneAnswer Australasian Property is awarded our ‘best in class’ title for this quarter. Social currency definition This award is reserved for schemes which have a three-year track record equal to, or greater than, the long-run returns.

On our regular savings basis, the average of the top five funds would have resulted in you earning $24,872 more than you have contributed; last quarter it was $22,200.

The average annual long-term compound return of the top five aggressive funds’ earnings after-tax and after-fees is 12.4% which is 6.4% per annum more than the average of the top five default funds. Fx position definition The top 5 aggressive funds are adding over $14,400 more value to investors than the top 5 default funds.

Stock picking (active management) as opposed to index tracking (passive management) remains the flavour of the day when it comes to producing top ranking funds within KiwiSaver. Definition of currency ASB with a passive strategy is slowly eating away at the lead the active managers have enjoyed to date.

Socially responsible funds have continued to perform below par. Restricted currency definition This will be disappointing for those wanting a feel-good factor to their investment strategy.

We are continuing to see an overlap between the top end of the Growth category and the bottom of the Aggressive category. Currency devaluation definition MJW noted in their latest report (mentioned above), there is little to be gained from taking on additional risk in KiwiSaver – we concur.

While some funds are holding greater positions in Cash and Fixed Income, the defensive positioning in this category, where the returns are traditionally more volatile, is reducing the impact of under-performing global equity markets.

Milford’s Active Growth, Quay Street NZ Equity and ANZ OneAnswer Australasian Share Fund have been reaping the rewards of investing a majority of their funds into NZ shares. Definition for currency The NZ share market has returned over 30% for the last 12-months and if a fund didn’t hold an exposure to, or were under-weight NZ shares, their performance has suffered.

The right fund type for you will depend on your tolerance for risk and importantly on your life stage. Currency value definition You should move only with appropriate advice and for a substantial reason.

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