When to take a look at your KiwiSaver
Returns of Our Model Portfolios
Data is one of a financial adviser’s most powerful tools. The table presented below is an excellent example of how we can use historical returns to inform and educate investors. It provides annual returns across our range of model portfolios, from the conservative 40/60 (growth/defensive) to the maximum growth 98/2 mix of shares and bonds/cash, covering performance from 1991 through to 2023. This data gives us the ability to offer investors valuable insights into long-term performance trends based on different portfolio mixes.
Why this table is valuable
The value of this table lies in its ability to show how portfolios have performed over nearly three decades. It allows clients to see how different mixes (from conservative to aggressive) have produced different returns. For clients who are new to investing or those seeking reassurance, it demonstrates a clear pattern: more maximum growth portfolios (like 90/10 or 98/2) tend to offer higher returns over the long term but come with higher volatility. On the other hand, conservative portfolios (like 40/60) are more stable, but offer lower returns over time.
The inclusion of 1- and 3-year rolling returns provides further information. A 1-year rolling return looks at all the annual returns changing every month rather than restricting ourselves to a calendar year.
The table also puts the focus on risk, showing how different mixes influence portfolio returns, and risk (annualised standard deviation, bottom row).
Annual Returns of phwealth Classic Model Portfolios
|
Growth/Defensive Mix |
40/60 |
50/50 |
60/40 |
70/30 |
80/20 |
90/10 |
98/2 |
||
|
1991 |
20.9% |
22.7% |
25.0% |
26.8% |
29.2% |
31.6% |
33.0% |
||
|
1992 |
5.0% |
4.1% |
3.6% |
2.7% |
2.3% |
1.9% |
1.1% |
||
|
1993 |
17.1% |
18.9% |
20.9% |
22.2% |
24.3% |
26.5% |
27.6% |
||
|
1994 |
-1.9% |
-2.9% |
-4.1% |
-5.2% |
-6.4% |
-7.6% |
-8.4% |
||
|
1995 |
14.8% |
14.9% |
15.1% |
15.2% |
15.3% |
15.6% |
15.6% |
||
|
1996 |
11.5% |
11.3% |
11.2% |
10.8% |
10.7% |
10.4% |
10.2% |
||
|
1997 |
13.1% |
14.0% |
15.1% |
16.3% |
17.5% |
18.6% |
19.4% |
||
|
1998 |
11.4% |
12.0% |
12.6% |
13.5% |
14.1% |
14.9% |
15.6% |
||
|
1999 |
11.1% |
12.8% |
14.6% |
16.5% |
18.3% |
20.5% |
22.0% |
||
|
2000 |
6.6% |
6.4% |
6.4% |
6.5% |
6.5% |
6.3% |
6.3% |
||
|
2001 |
6.0% |
5.7% |
5.4% |
4.8% |
4.5% |
4.0% |
3.5% |
||
|
2002 |
-2.4% |
-5.1% |
-8.0% |
-11.2% |
-13.9% |
-16.9% |
-19.1% |
||
|
2003 |
10.4% |
11.8% |
13.2% |
14.3% |
15.7% |
17.1% |
18.0% |
||
|
2004 |
10.7% |
11.6% |
12.6% |
13.3% |
14.4% |
15.3% |
15.9% |
||
|
2005 |
11.1% |
12.2% |
13.3% |
14.5% |
15.6% |
16.7% |
17.7% |
||
|
2006 |
14.0% |
16.0% |
18.1% |
19.8% |
21.9% |
23.9% |
25.4% |
||
|
2007 |
3.9% |
3.5% |
2.9% |
2.4% |
1.9% |
1.6% |
1.2% |
||
|
2008 |
-4.4% |
-8.2% |
-12.3% |
-15.8% |
-19.7% |
-23.3% |
-26.0% |
||
|
2009 |
14.7% |
17.0% |
19.3% |
21.5% |
23.8% |
26.3% |
28.2% |
||
|
2010 |
8.7% |
9.1% |
9.6% |
10.1% |
10.5% |
11.0% |
11.2% |
||
|
2011 |
1.7% |
0.1% |
-1.6% |
-3.2% |
-4.8% |
-6.6% |
-7.8% |
||
|
2012 |
11.2% |
12.4% |
13.5% |
14.6% |
15.7% |
16.8% |
17.7% |
||
|
2013 |
7.5% |
9.1% |
10.7% |
12.7% |
14.3% |
16.2% |
17.7% |
||
|
2014 |
8.9% |
9.0% |
9.1% |
9.2% |
9.3% |
9.2% |
9.3% |
||
|
2015 |
5.9% |
6.2% |
6.4% |
6.6% |
6.9% |
7.0% |
7.2% |
||
|
2016 |
8.2% |
9.0% |
9.9% |
10.7% |
11.6% |
12.5% |
13.2% |
||
|
2017 |
10.6% |
12.3% |
14.0% |
15.7% |
17.4% |
19.1% |
20.4% |
||
|
2018 |
-1.0% |
-2.0% |
-3.0% |
-4.0% |
-5.1% |
-6.2% |
-7.1% |
||
|
2019 |
12.7% |
14.3% |
15.9% |
17.4% |
18.9% |
20.2% |
21.3% |
||
|
2020 |
6.0% |
6.0% |
5.7% |
5.4% |
4.9% |
4.2% |
3.6% |
||
|
2021 |
5.6% |
7.9% |
10.4% |
13.1% |
15.9% |
18.9% |
21.5% |
||
|
2022 |
-8.8% |
-9.1% |
-9.1% |
-9.2% |
-9.2% |
-8.9% |
-8.5% |
||
|
2023 |
9.1% |
10.1% |
11.2% |
12.5% |
13.7% |
15.1% |
16.2% |
||
|
SUMMARY STATISTICS |
|
|
|
|
|
|
|
||
|
Highest 1 year rolling return |
22.0% |
25.6% |
29.7% |
33.9% |
39.2% |
44.7% |
49.4% |
||
|
Lowest 1 year rolling return |
-9.5% |
-11.7% |
-15.8% |
-19.2% |
-23.0% |
-26.5% |
-29.0% |
||
|
Highest 3 year rolling return, per annum |
14.8% |
16.1% |
18.2% |
20.3% |
22.5% |
24.7% |
26.4% |
||
|
Lowest 3 year rolling return, per annum |
0.4% |
-1.0% |
-2.8% |
-4.6% |
-6.5% |
-8.2% |
-9.5% |
||
|
Annualised return |
7.7% |
8.0% |
8.4% |
8.6% |
9.0% |
9.3% |
9.5% |
||
|
Annualised standard deviation |
5.1% |
6.2% |
7.4% |
8.5% |
9.7% |
10.9% |
11.9% |
||
Note: All model portfolio returns are after fund manager fees but don’t include custodial and adviser fees
Why we enjoy using this table in client meetings
This table can be a powerful tool when speaking with clients about volatility, risk and return. For instance, if we’re meeting a volatility-averse client, we can point out how the more conservative portfolios (like 40/60) have fared better during tough years, like in 2008 or 2022, when share-heavy portfolios (like 90/10) suffered. Meanwhile, clients who are more comfortable with volatility and are aiming for higher returns can see the long-term benefits of higher share allocations, despite occasional dips.
One key takeaway for clients is understanding that downturns, while unsettling, are a natural part of the investment journey. By pointing out the six negative years in this table, we can show that setbacks do occur on a regular basis but are not the norm. Highlighting that portfolios have historically bounced back in subsequent years helps reassure clients that short-term losses don't derail long-term goals.
A clear example of this can be seen in the 80/20 portfolio during the 2008 global financial crisis. In 2008, it suffered a significant drop of -23.6%, and the following year, 2009, it showed a strong rebound of 23.8%. While these numbers suggest a complete recovery, the portfolio in 2009 was working from a lower base after the downturn. Although the positive return reflects progress, it didn’t fully restore the portfolio to its previous value. That happened the following year.
Conclusion
In summary, this table serves as an excellent resource for guiding investors through the complexities of portfolio performance. By providing nearly three decades of historical returns, it enables us to explain key investing principles such as growth vs defensive, volatility, risk tolerance, and long-term thinking. Whether a client is conservative or maximum growth in their risk profile, this data allows us to tailor our discussions, helping clients make informed decisions and remain confident about their financial future.
Note: This article must not be confused with financial advice. It is of general interest only. For personal financial advice please contact one of our financial advisers.
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