Photo: Wang Huan / ImagineChina / AFP
Tesla's falling share price has hit KiwiSaver's lowest-performing fund's returns.
KiwiSaver provider Koura both topped recent Morningstar data, with a 150.4 percent return over 12 months in its cryptocurrency fund, and bottom of the ranks, with a 29.9 percent fall in its clean energy fund.
The crypto fund has been outperforming for the past year on the back of strong overall cryptocurrency performance.
Koura founder Rupert Carlyon said because investors were limited on how much of their portfolio could be invested in the crypto fund, he was not worried about what might happen when that strong run came to an end.
"People are desperate for it and we can give it to them in a safe way… who knows what's going to happen next?"
He said the clean energy fund was at the other end of the table because of sector challenges. It had a significant investment in Tesla, which has had its share price fall about 75 percent from the peak.
Shares traded for US$407.36 in November 2021, but were at US$177.46 this week.
"That's a big one. Clean energy as a theme is going through some tough times… particularly with the prospect of a Donald Trump election, that's weighing on a lot of investors' minds."
He said because a lot of battery and solar technology was now coming from China, the United States' application of increased tariffs would be a win for the sector in that country.
"The industry was clearly a bit frothy previously and that has unwound," Carlyon said. "What we have seen with the US stock market is that good stuff that is profitable and delivering good outcomes for investors has recovered well, and stuff that's slightly more marginal is struggling - smaller, early stage companies are struggling a bit. That's why the recovery hasn't quite happened."
He said the motivation to invest in the sector had not changed.
"We do have to figure out a way to dercarbonise the economy and make all the stuff work. There will be winners in this space."
Greg Bunkall, data director at Morningstar, said the past year had been "brutal" for renewable energy stocks.
"Unlike established companies in other sectors, this industry is dominated by younger firms and projects. These firms rely heavily on debt financing for new projects and product development. With rising interest rates, securing funding has become significantly more challenging, hindering growth, and impacting stock prices.
"Despite the current pessimism, there are reasons for optimism. Government policies around the world are increasingly mandating a larger share of energy to come from renewables. Additionally, the global push for cleaner energy continues to drive investment towards renewable energy solutions.
"In essence, while the short-term outlook might be bumpy due to funding constraints, the long-term prospects for renewable energy remain strong."
He said the Koura clean energy fund's performance had been weak through the start of the year, and April also presented difficulties.
"It's important to note that the Koura Fund is unhedged. This means the fund's performance is also directly tied to fluctuations in the New Zealand dollar compared to the US dollar. Movements in the exchange rate can therefore impact the fund's value."
