KiwiSaver funds shake off Middle East tension
KiwiSaver funds rebounded in the June quarter, after a rocky start to the year.
Tuesday, August 4th 2026, 8:07AM 
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Morningstar’s latest KiwiSaver survey shows that KiwiSaver funds under management ended the June quarter at $147.7 billion, up $10 billion over the quarter.
The increase was driven by investor contributions and market returns.
Average returns for multisector funds ranged from 3.3% for the quarter for conservative funds through to 11.9% for aggressive funds.
Morningstar said funds had staged a strong recovery through the three months, as investors started to “look through” the geopolitical shocks of the start of the year. Conflict in the Middle East hit markets in the first quarter, as oil prices rose.
Morningstar noted that while tensions were still elevated in the second quarter, the resumption of shipping through the Strait of Hormuz and ceasefire discussions helped energy markets stabilise.
“In New Zealand dollar terms, international equities delivered solid positive returns. New Zealand equities also recovered, although they continued to lag global peers amid subdued domestic economic conditions and relatively weak earnings expectations. Bond markets were more mixed, with yields remaining elevated as central banks signaled that inflation risks had not fully disappeared despite easing energy prices.”
Morningstar said it was a reminder for KiwiSaver investors that market sentiment could shift quickly.
Portfolios that were affected by volatility earlier in the year also participated in the recovery.
“The quarter also highlighted that while geopolitical events can trigger sharp market moves, their long-term impact is often determined less by the initial shock than by whether they materially alter economic growth or corporate profitability. Maintaining diversification across asset classes and regions again proved valuable, allowing investors to participate in the rebound while reducing the risk of reacting to short-term market volatility.”
ANZ still has the largest share of the KiwiSaver market, at 16.3% with $24 billion under management. ASB is second at 14.7%. Fisher Funds, Milford and Westpac round out the top five.
It follows MJW’s investment survey for June, which covers fewer KiwiSaver funds but showed similarly strong returns for the quarter.
Recently-added MAS was celebrating its inclusion at the top of the growth and balanced funds over a one-year period in the MJW survey.
Helen McDowall, chief investments product officer at MAS, said the results reinforced the importance of looking beyond short-term market movements when assessing KiwiSaver scheme performance.
"Markets will always experience periods of volatility, but successful investing is about maintaining a long-term perspective.”
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However, the averge annual costs of -0.97% for Balanced funds have eroded that to be slighly below BMK after costs consistent with typical SPIVA studies.
Note this cost number is for the 45 Balanced Funds used only - for all KiwiSaver Funds it is closer to -0.70% p.a.
The presentation goes on to show that quite a bit of return is being left on the table by the one size fits all view of risk.