KiwiSaver funds double with 1000 joining daily

Investors have $5.5 billion in KiwiSaver funds, more than double the amount a year ago, with 1000 new members joining every day, according to an investment strategist.

People put about $2.85b in contributions into KiwiSaver funds in the year to March, according to actuaries and investment strategists Eriksen and Plan For Life.

The report does not give a breakdown of fund investment returns, but rather the flow of money into each fund, with Fidelity Life leading the pack for rate of growth. Some smaller funds are growing faster than the big "default" funds.

The report recorded overall funds under management have grown by 108 per cent since March 31, 2009, from $2.6b to $5.5b.

Eriksen chief executive Jonathan Eriksen attributed the doubling to "the strong flow of new investment savings into KiwiSaver" and "equally strong bounce-back of the value of the underlying assets since the global financial meltdown".

While the report did not specifically break down these two factors, he said, it was something they were looking to identify.

"The number of KiwiSaver members is growing very fast, with about a thousand people joining every day. Their contributions keep coming while there is only a small amount of withdrawals.

"However, reflecting that the relative rate of growth slowed somewhat during the March quarter, it is nevertheless still an impressive 10.9 per cent since December 2009."

The annual gross inflow jumped by 17 per cent to $2.849b in March 2010 compared with $2.431b in March 2009. The growth in inflow on a quarterly basis was 20 per cent between March 2010's $676 million and December 2009's $564m.

Mr Eriksen said the buildup of contributions was an incentive for members to take a harder look at their providers, as they now had more at stake.

Some KiwiSaver providers have been doing much better than the six default providers contributions are put into if a member does not specify where they want their money to go.

"BT/Westpac, Fidelity, Gareth Morgan and Fisher Fund in particular, they are not default providers but they are pushing it, more than doubling their funds under management year-on-year," Mr Eriksen said.

- © Fairfax NZ News