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Negative quarter for KiwiSaver diversified funds: Mercer

Fuseworks Media
Fuseworks Media

Wellington, Aug 11 NZPA - KiwiSaver diversified funds experienced their first negative quarter since March 2009, with negative returns across all fund types for the three months to June, consulting and investment firm Mercer says.

The decline was mainly due to global stock market volatility.

The median KiwiSaver growth fund fell 6.1 percent for the quarter, while the more conservative default fund median only fell 0.2 percent.

Share markets, which had risen strongly for 12 months, went into reverse during the past quarter as fears about European sovereign debt sparked concern about the outlook for the global economic recovery, Mercer said today.

Funds with the highest allocation to growth assets -- shares and property -- were affected the most.

Mercer New Zealand head Martin Lewington said global sharemarket volatility had stalled the run of positive KiwiSaver fund returns achieved in the past year.

"The choppiness in the markets could continue for some time, but we're not expecting a repeat of the economic slowdown of 2008," he said.

"We believe we are still heading in the direction of recovery, even if it is at a slow pace. Therefore shares and property still have a place in KiwiSaver funds."

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