Global market chaos knocks billions off value of KiwiSaver

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Financial market turmoil has wiped $5 billion off the value of KiwiSaver funds in the past three months.

A survey by investment research firm Morningstar shows asset values ​​fell to $82.8 billion in the three months to June from $87.7 billion in the previous quarter.

Morningstar Asia-Pacific director Tim Murphy said financial markets fell in the face of a litany of negative factors.

“A global economy already weakened by the pandemic has been hit by several shocks: higher than expected inflation around the world, notably in the United States and major European economies, causing financial conditions to tighten; a worse than expected slowdown in China , due to Covid -19 outbreaks and lockdowns, and other negative fallout from the war in Ukraine.”

The New Zealand stock market fell 10.2% in the quarter, while the Australian market fell 9.7% and the global benchmark fell 6.2%.

The smallest average declines in value were for Conservative funds, which fell 4.2%, while Balanced funds saw an average decline of 7.1%, Growth funds fell 9%, and Aggressive funds , which typically invest in the high-growth tech sector, fell an average of 10.1%. % for the quarter.

However, Murphy said investors need to look beyond short-term moves and judge KiwiSaver as the long-term retirement savings plan it’s designed for.

Over periods of three, five and ten years, annual returns have been positive, varying between 4.5 and 10%.

“I would challenge anyone to say it hasn’t been a good long-term investment.”

ANZ remained the largest supplier with $17.2 billion, although its market share declined, with ASB increasing its share slightly to $13.3 billion and a market share of 16%, followed by Westpac and FisherFunds.

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