Does paying more for your KiwiSaver give you a better return? Well, maybe. But maybe not.
RNZ has conducted analysis of Morningstar’s most recent KiwiSaver data, comparing long-term returns to the funds’ total cost ratios.
It showed that the highest performers in the conservative category, were Milford, QuayStreet and Fisher TWO.
Fisher TWO was charging less than average – at 0.52% compared to 0.62%.
Milford and QuayStreet had high fees relative to the category but were low overall and their returns were higher than some of the more aggressive fund types that would usually be more expensive.
Milford had returns of 5.1% a year over 10 years, compared to a peer group average of 4.1%. Simplicity had the lowest fees for that category but does not have 10 years of returns. Over five years, it returned 1.9% a year.
Of moderate funds, Generate and BNZ were solid performers. BNZ had fees of 0.45% compared to an average of 0.8% for that type of fund and was the second best for returns over 10 years.
Generate was first but had higher fees, at 1.14%. Westpac had the lowest fees and was fourth-best performing.
Among balanced funds, Quay St and Milford were delivering strong returns but had some of the higher fees – at 1.03% and 1.07% respectively, compared to an average 0.75%.
SuperLife Ethica was the third-best performer and had fees of 0.7%.
Simplicity had the cheapest funds of that group, at 0.25%. It does not have 10 years of history but was 11th over five years.
Milford, Generate and Quay St were the outperformers in the growth category. Milford returned 10.4% a year over 10 years compared to an average 7.8% for that group of funds.
But investors were paying higher fees – between 1.25% and 1.29% compared to an average 0.97%.
Generate, FisherTWO and Booster were best performing in the aggressive categories.
On the flipside, ANZ was the poorest performer in the conservative category but was charging above-average fees. Booster was ranked eighth and was charging 1.11% compared to the average 0.62%.
Among moderate funds, Booster and Fisher Funds appeared to be providing lower returns for higher fees.
In the balanced category, ANZ was charging 0.91% compared to an average 0.75% and was ranked 15th. Booster was 11th with fees of 1.22%.
Booster also seemed expensive compared to its returns in the growth category.
Morningstar data director Greg Bunkall said there did not seem to be a strong correlation between paying more for a fund and getting a better return.
“There are some good active – which cost more – and good passive options -which cost less.
“Depending on what time period, or cohort you choose you can get widely differing results. My suggestion is as an investor, get an idea about the style you like and then assess those providers who offer that service at that price point and make sure you are in the right risk profile.”
Stefan Stevanovic, head of international equities at QuayStreet Asset Management, said there was not just one one contributing factor that had helped it perform on a returns to fees basis.
“There are numerous drivers at play which have contributed to QuayStreet’s strong performance. If we had to summarise it briefly it would be centred around our heavy emphasis of understanding current risks.
“This helps with filtering out a lot of the noise and narrows our focus in areas that tend to matter. When you pair that approach with a robust and fundamentals driven portfolio construction process, you tend to see improvement in risk-adjusted performance.”
Fisher Funds chief investment officer Ashley Gardyne said its funds had delivered solid returns in the past 12 months.
“That said, relative to benchmark, our returns aren’t where we’d like them to be.
“As an active manager there will inevitably be periods when returns lag as well as beat the benchmark. History tells us that performance is cyclical, and occasional periods of underperformance are part and parcel of delivering strong long-term results.
“Our team are always looking for ways to lift returns and we think we are well placed to deliver strong outcomes in the years ahead.”
Booster chief executive Di Papadopoulos said the data did not capture the value of all services being offered.
“They show that Booster’s performance is returning firm results, but don’t reflect value delivered with a host of other – and in some cases unique – offerings to our KiwiSaver members.
“The Morningstar report also does not account for the level of risk being taken in each fund, which is a measure central to our investment approach; we target lower levels of month-to-month volatility than peer funds, to improve how well funds can withstand market volatility.
“A key driver of Booster’s investment strategy is to smooth out market highs and lows for KiwiSaver members, such as during global turmoil following the pandemic, and US tariff uncertainty affecting the global economy.
“Monitoring of the seven-year period up to June 2025 for risk-adjusted returns, has Booster’s Socially Responsible (SR) Balanced and Balanced funds ranked third and fourth respectively, out of 16 funds.”
She said Booster’s fees included access to financial advice, free accidental death cover, and access to its budgeting app.
The highest-performing fund over the 12 months to June was Koura’s Bitcoin fund, which returned 73%.
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Koura founder Rupert Carlyon said it had an annualised 76% per year return over three years. It has a total cost ratio of 1.1%.
“This outperformance has been driven by the normalisation of Bitcoin over this period.
“We saw the launch of the ETFs in the US which enabled institutional investors to jump into the asset class. The US now has a very pro crypto administration which is likely to drive the continued growth of Bitcoin and other crypto assets.
“When we launched this fund three years ago we had a large number of commentators saying it was inappropriate for KiwiSaver investors to be investing in a high risk and speculative asset such us Bitcoin. Our perspective has always been that investors should be able to pick and choose where they invest their hard earned funds.
“Our job as a manager is to ensure that they are aware of the risks and invest appropriately to make sure that their retirement is not entirely put at risk. “
Financial Markets Authority executive director of licensing and conduct supervision Clare Bolingford said there was inherent subjectivity in what would constitute value for money for investors.
“In 2022, the FMA published research which showed different drivers that influence consumers’ choice of the KiwiSaver provider and where the consumers see the value and benefits being delivered.
“In addition, FMA published this guidance on managed funds fees and value for money FMA Funds, which includes principles and useful questions to ask to assist investors.”
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