ANZ the winner among the big banks in the KiwiSaver market, actuaries declare

Short headline: 
Big bank KiwiSaver performance assessed

ANZ is doing the best out of the big banks in the KiwiSaver market, according to Melville Jessup Weaver.

The firm of consulting actuaries has released a crunchy report asking which bank is "winning the game" in KiwiSaver covering ANZ, ASB, BNZ, Kiwibank and Westpac.

It concludes that the winner is ANZ.

"The rankings for each of funds under management, fees and performance are summarised in the table below. Note that as we have looked at the results from the perspective of a bank we have given a top rating where the bank's fees are highest. We have just looked at the performance over the period since the BNZ scheme was launched (in February 2013), which has been beneficial to Kiwi Wealth and soft for BNZ. Equal weighting has been given to each section to arrive at an overall ranking," Melville Jessup Weaver says.

Among the many points of interest in the report is each bank's split of KiwiSaver assets between conservative, balanced and growth. As shown in the table below, ASB, BNZ and Westpac are all heavily weighted towards conservative. ANZ and its OneAnswer scheme, whose members are mostly clients of financial advisers, have much higher allocations to growth.

"Perhaps ANZ have been more active in moving members of their default fund into a more appropriate investment strategy," Melville Jessup Weaver suggests.

The report also shows the average member balance for each scheme split by the conservative, balanced and growth categories. Interestingly this shows ANZ's growth fund with the second lowest average balance of all the growth funds at $5,490. The only one lower is the relatively new BNZ scheme at $4,970.

In terms of average member balances, OneAnswer leads the way, according to Melville Jessup Weaver's chart below.

Whilst KiwiSaver offers banks a great growth opportunity, especially in an environment of low to moderate credit growth, and endless cross selling opportunities, their behaviour has caught the eye of the Financial Markets Authority. FMA CEO Rob Everett told interest.co.nz last year the regulator is watching closely, keen for any "switching scandal" to be avoided.

Here's Melville Jessup Weaver's full report.