Media Release
Global financial volatility impacts KiwiSaver returns - Mercer’s KiwiSaver Survey
11 August 2011
KiwiSaver diversified funds produced contrasting results for the quarter ending 30 June 2011, with high volatility
within the global financial markets affecting returns, according to Mercer’s KiwiSaver survey.
Funds with the lowest allocation to shares and property performed best, with the median KiwiSaver Conservative fund
returning 1.0%, compared to the more aggressive Growth funds which recorded a median return of -1.4%.
The best performing fund for the quarter was the Mercer Conservative Fund which returned 1.5% over the period.
Martin Lewington, Head of Mercer New Zealand said although KiwiSaver funds started the year with positive returns, the
recently volatility has tempered growth.
“KiwiSaver funds fared well through the first six months of 2011 with a run of positive returns, but heightened
volatility this quarter has produced mixed returns. The market jitters continue on the back of a string of weak economic
reports and ongoing concerns over global growth prospects and the impact sovereign debt problems will have on the Euro
longer term.
“Global growth momentum has slowed down, resulting in a period of market volatility. Adding to uncertainty is the US
debt issue; the market is watching closely to see how the problem is dealt with over the coming months. Despite these
factors we remain cautiously optimistic on the economy and believe the recovery will continue. The domestic economy also
took a hit early this year due to the earthquake in Christchurch, but it is promising to see the NZ sharemarket bucked
the global trend, up 0.5% for the quarter,” said Mr Lewington.
Mr Lewington added that it is important investors maintain a long term outlook, noting that while growth funds were the
hardest hit this quarter; these funds have actually topped the performance tables in two of the last three calendar
years.
“Over the longer term, default funds which have the highest allocation to bonds and cash remain the best performers
since KiwiSaver’s inception in 2007, largely due to their superior performance in 2008, at the height of the global
financial crisis. But over a 30 year investment horizon or longer, the picture could be very different; hence the
importance of selecting investment options which are appropriate given the investor’s life stage” said Mr Lewington.
Quarter to 30 June 201112 months to 30 June 2011Fund TypeMedian Return (%)Top Performing FundTop Fund Return (%)Median Return (%)Top Performing FundTop Fund Return (%)Default0.9Mercer Conservative1.56.4OnePath Conservative7.3Conservative1.0Westpac Conservative1.47.6OnePath SIL Conservative Balanced9.6Balanced-0.1ANZ Balanced0.99.9Westpac Balanced13.3Growth-1.4OnePath SIL Balanced Growth0.612.9Westpac Capital Protection15.9
Mercer KiwiSaver Survey2008 (%)2009 (%)2010 (%) 6 mths to 6/2011 (%)Default Universe Median 0.77.25.92.4Conservative Universe Median -2.28.16.13.0Balanced Universe Median -12.712.67.02.4Growth Universe Median -22.116.67.22.1
N.B. Returns stated in the survey are before tax and after management fees (gross of tax and net of fees).
ENDS
About Mercer:
Mercer is a global leader in human resource consulting, outsourcing and investment services. Mercer works with clients
to solve their most complex benefit and human capital issues by designing, implementing and administering health,
retirement and other benefit programs. Mercer’s investment services include investment consulting, implemented
consulting and multi-manager investment management. Mercer’s 20,000 employees are based in more than 40 countries. The
company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York and Chicago stock exchanges. For
more information, visit www.mercer.co.nz.