Koura Bitcoin was one of the poorest performers in the latest KiwiSaver survey. Photo: Jakub Porzycki / NurPhoto / NurPhoto via AFP
Falling Bitcoin prices have dragged the performance of Koura's Bitcoin KiwiSaver fund to the bottom of the table.
Morningstar has released its latest KiwiSaver survey, which shows that over the year, the best performer was Kernel's S&P Global Clean Energy Fund, up 59.9 percent.
The poorest performer was Koura Bitcoin, down 9.7 percent. It was down 22.8 percent over a quarter.
On average, conservative funds returned 5.8 percent over a year, moderate 6.8 percent, balanced 9.5 percent, growth 9.7 percent and aggressive 12.8 percent.
The price of Bitcoin has fallen from more than NZ$200,000 in October to just over NZ$115,000.
Koura founder Rupert Carlyon said he had been pleasantly surprised by the lack of reaction from investors. "We've had very minimal outflows over the last kind of four to six weeks as the price continues to fall."
He said that was for a few reasons, including that people had made a deliberate choice to invest in the fund.
"We make sure that before people get there, they understand the volatility of Bitcoin, that this is kind of part and parcel of being a Bitcoin investor, and then with our limits, it's not a major, major part of their KiwiSaver accounts.
"Whether it is 3 percent or up to 10 percent it's meaningful but it's not as though they're seeing the whole value of their KiwiSaver drop by 40 percent or 45 percent."
Koura allows up to 10 percent of an investor's KiwiSaver balance to be invested in its Bitcoin fund and investments are rebalanced if they reach 15 percent.
He said the price movements seen in recent months were part of the expected cycle.
"We know that it drops. We've seen it go up to 70 percent before. Every time this happens we see the same old conversation of Bitcoin is at the start of the end - luckily we haven't seen that this time but I do firmly believe that the volatility is still there because the liquidity issues haven't been solved.
"It's still a small asset without a huge amount of liquidity and therefore you're always going to see massive price swings."
This is the first Morningstar survey that includes three years of data for new provider Kernel.
It is top of the cash and high-growth categories, alongside Quay St on most of the other categories.
"What's coming through clearly is that when markets are chaotic, the controllables start to dominate," founder Dean Anderson said.
"The last few years haven't rewarded clever market calls - they've rewarded process.
"Kernel's focus has always been on evidence, transparency and cost discipline, with fees in many cases up to 70 percent below category averages.
"For KiwiSaver members, the takeaway is straightforward. Do the homework. Understand what you own, what you're paying, and why your portfolio is built the way it is. In uncertain markets, those fundamentals are proving to matter more than ever.
Report author Greg Bunkall noted that the quarter had been positive for most KiwiSaver funds, led by global equities.
New Zealand's share market was only up modestly while the Australian market was broadly flat.
He said Simplicity had a strong quarter.
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
