Morningstar said global equities outperformed local markets.
New Zealand equities posted modest gains, while Australian equities were broadly flat in local terms but slightly positive for New Zealand investors because of currency effects, it said.
Morningstar said “defensive assets provided limited but stabilising returns”, with global and New Zealand corporate bonds modestly positive, offset by small losses in longer-dated New Zealand government bonds.
The New Zealand dollar weakened through much of the quarter before rebounding in late December, meaning unhedged offshore assets benefited from a currency tailwind, contributing to stronger New Zealand-dollar returns relative to hedged exposures.
Cryptocurrency assets fell sharply over the quarter, detracting from returns where allocations were meaningful, the firm said.
Among the KiwiSaver products, tables in the report showed the Koura Scheme Bitcoin scheme returned -22% for the December quarter and -9.7% for the year.
Since December, Bitcoin has continued to fall, losing about a quarter of its value.
Last week, it sank below US$65,000 ($108,000) for the first time since 2024, wiping out all of the gains it had made since Donald Trump was elected to his second term as US President.
Morningstar said the top-performing product over the quarter was a 12.2% return from Kernel S&P Global Clean Energy, which also registered the highest return – 59.9% – for the 12 months.
Overall, growth-oriented KiwiSaver funds generally recorded a solid quarter, supported by offshore equities and favourable foreign exchange translation, while balanced and conservative funds delivered smaller, steadier gains as bond returns remained subdued.
Most multi-sector KiwiSaver funds produced positive returns.
Simplicity had a strong quarter with its funds in the top of most of its categories and other than Simplicity, MAS KiwiSaver and ASB KiwiSaver showed some strong performance across the board, and a couple of Kernel’s low-cost, multi-asset funds had some strong showings.
ANZ led the market share with over $23b.
ASB was in second position, with a market share of 14.8%. Then came Fisher, Milford and Westpac.
The big five accounted for about 65% the assets in Morningstar’s database, or around $90b under management
Morningstar said over 10 years, the aggressive category average had given investors an annualised return of 9.5%, followed by growth (8.2%), balanced (6.9%), moderate (5.0%), and conservative (4.2%).
JamieGray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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