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The value of KiwiSaver funds improved to the end of June, amid caution in financial markets and a mixed economic environment in New Zealand and around the world.
Morningstar's survey for the three months ended June showed the value of savings rose $3.5 billion for the quarter to $110.8b, following a $4b increase in the first quarter.
Average multi-sector category returns for the June quarter ranged between 0.3 percent and 0.8 percent, as most funds posted incremental gains.
Morningstar data director Greg Bunkall said the second quarter was a cautious period for investors.
"While global growth dynamics offered some positive signals, domestic challenges persisted. The equity market delivered moderate gains, primarily supported by international exposures, while fixed income provided some stability amidst fluctuating yields," he said.
Equity markets were mixed during the quarter, while commodity prices were volatile. However, fixed income markets saw a slight recovery.
At the same time, the Reserve Bank maintained its cautious stance, and globally, economic performance was a mixed bag.
"Many multi sector KiwiSaver funds produced positive returns over the June quarter, and many produced negative returns with funds that contained risk assets struggling the most," Bunkall said.
As for the best performing default funds, Booster and Simplicity had the best 1-year returns.
Morningstar said most of the default funds saw 10 percent returns for the year, with a notable exception being Fisher Funds Default, which was at 8.3 percent.
Bunkall said KiwiSaver should be judged on longer-term, 10 year returns.
Therefore, when looking at the past 10 years for conservative funds, Milford took out top spot with returns of 5.5 percent.
For moderate funds, Generate was the best performer over the past decade at 5.7 percent.
Amongst the balanced funds, Milford again had the best returns at 8.7 percent. Milford also had the best 10-year returns in the growth category, at 10.5 percent.
For aggressive funds, Generate recorded the best result over the past decade, with returns of 10.2 percent.