KiwiSaver funds with a higher exposure to international shares had the strongest performance in the last quarter of 2021 as the New Zealand share market had a weak end to the year. 

Tim Murphy, director of manager selection, Asia-Pacific with Morningstar, said at the end of the December quarter international shares made strong gains with a return of 8.6 per cent and were up 28.1 per cent over the year in New Zealand dollar terms. 

"World equity markets continue to be optimistic about the global economy despite the arrival of the Omicron variant impacting businesses via worker shortages and increasing supply chain disruptions." 

But New Zealand shares missed out falling 1.8 per cent over the quarter and 0.4 per cent over the year heavily influenced by large losses in some of the top 10 stocks like A2 Milk and Meridian. 

Murphy said KiwiSaver funds generally reflected the resilient underlying market conditions experienced over the December quarter with the majority of multisector funds experiencing a return of greater than 1 per cent. 

"Funds with larger exposures to international growth assets generally outperformed over the three-month period." 

The average returns for funds in multisector categories ranged from 0.7 per cent for the conservative category to 4 per cent for the aggressive category over the quarter. 

Top performers over the quarter were the ANZ Default Conservative fund which returned 1.5 per cent in the conservative category, the ASB Positive Impact fund which rose 4.1 per cent in the balanced category and Pathfinder Growth which was up 5.1 per cent topping the growth category. 

But Murphy said it was most appropriate for investors to evaluate the performance of their KiwiSaver fund over the longer term. 

Over 10 years the aggressive category has had the highest average return at 11.6 per cent per annum, followed by the growth category at 11.3 per cent per annum. The average return for funds in the balanced category has been 9.1 per cent and conservative 5.8 per cent per annum. 

Over 10 years the Aon Russell Lifepoints 2015 fund is the top performer for the conservative category up an average of 6.9 per cent per annum. The Milford balanced funds tops the balanced category with a return of 11.9 per cent per annum and in the growth category the Milford Active Growth fund is top with an average of 14.6 per annum. 

Total KiwiSaver assets on Morningstar's research database rose from $77.3 billion in December 2020 to $88.9b at the end of 2021 across the 21 providers it analyses data from. 

ANZ remains the largest provider with $19.28b although its market share fell from 22.7 per cent to 21.7 per cent over the year. 

The second largest provider ASB which manages $14.5b also saw its market share fall from 17.3 to 16.3. 

Westpac is third largest with $9.2b and saw its market share fall from 11 per cent to 10.3 per cent. 

AMP, BNZ, FAANZ, Mercer, Nikko AM and Smartshares all saw their rankings fall in 2021 while Aon, Booster, Juno, Kiwi Wealth, Medical Funds Management and Simplicity have seen a rise in their ranking.