Gareth Morgan returns 4.1pc to KiwiSavers
Gareth Morgan Investments' KiwiSaver scheme delivered a gross return of 4.1 per cent on its last financial year, as the firm trimmed its exposure to equities to help buffer it against offshore volatility.
That's according to the wealth manager's latest financial report, which showed total assets under management stood at $715 million for the year to March 31. This included member contributions of $199m, withdrawals of $22.1m and taxes of $9.3m in the period.
The firm generated a gross investment return of $29.3m on the funds, but once fees and expenses were factored in, net investment returns stood at $22.6m for the year, a net return of 3.2 per cent.
Management and administration fees rose 37.2 per cent to $6.6m in the year, or $112.63 for each member in the scheme.
Gareth Morgan is an active manager, which means its incurs additional fees and administrative costs as it buys and sells its way in and out of assets to chase returns.
Of the firm's three investment portfolios, the conservative fund performed the best, delivering a net return of 3.1 per cent for the year versus an investment benchmark of 2.4 per cent. That was driven by bonds, which have outperformed almost every other asset class in the past few years as the slowing global economy and eurozone crisis has driven investors into safe haven assets like fixed income.
The firm's balanced fund posted a gain after tax and fees of 1.7 per cent, which was weighed against a performance benchmark of zero.
The growth portfolio returned a net loss of 0.8 per cent over the period, reflecting volatility in global stock markets. That still beat the wealth manager's benchmark of a 2.2 per cent loss for the year, about on par with the performance of the MSCI World Index.
Of the almost $199m in new funds received in the year, 38 per cent was from employee contributions, 23 per cent was from employers, and 8.5 per cent was from voluntary contributions.
The remaining 30 per cent was transferred from other KiwiSaver and superannuation schemes.
As of the end of March, there were 57,617 members in the Gareth Morgan KiwiSaver scheme, with 1744 exits and 5173 additions in the financial year.
This was the firm's first result as a subsidiary of Kiwibank, with the government-controlled lender having acquired Gareth Morgan Investments in January for an undisclosed sum.
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