New data reveals top and worst performing KiwiSaver funds

  • 20/11/2023

A new report has revealed the staggering amount of money Kiwis could be missing out on at retirement by making a simple KiwiSaver mistake.  

The mistake could be so costly, people could be missing out on the equivalent of a Mercedes Benz.  

National Capital, a KiwiSaver advisory firm and watchdog published a report on Monday covering the third quarter of this year.    

From July to September, the report used data from National Capital to identify the top and worst-performing funds.  

The study found the top-performing growth funds can significantly outperform the bottom-performing growth funds, based on data from the latest Value for Money report released on Monday morning. The difference can be an extreme $88,000 at retirement - or the equivalent of a Mercedes Benz GLC 200 SUV at today’s prices.  

National Capital said it collected annualised rolling 5-year return data for KiwiSaver funds in the Growth strategy from 2013 to 2023.  

It calculated the average returns for the top quartile funds (the best performers) and the bottom quartile funds (the worst performers) to understand the performance gap over time.   

"We sought to understand the projected future returns for the funds based on the historical data and its impact," the report stated. 

For an average 40-year-old Kiwi earning $70,000 per year, with $28,000 currently in their KiwiSaver fund who contributes 4 percent of their income, the performance gap could cost them $88,847 in retirement savings at age 65, the report found. 

National Capital said the data shows Kiwis need more awareness about how to choose the right fund.     

"This is an important reminder that making the right decisions when it comes to choosing KiwiSaver providers and funds can have a significant impact come retirement," the report said. 

"However, the choice doesn't just come down to only comparing past performance. There are a multitude of factors that need to be considered when choosing a KiwiSaver provider, such as Capability, Stability, Process and Portfolio Composition."  

Analysing fund performance from the last decade, National Capital found the five-year (2018-2023) average difference in returns between the top and bottom-performing funds in the growth category varied significantly, with an average difference of 2.55 percent per annum.  

The data showed the top-performing fund was the Milford KiwiSaver Active Growth Fund, which had an annual return of 7.5 percent.   

QuayStreet KiwiSaver Growth came in second with an annual return of 6 percent while Simplicity KiwiSaver Growth Fund was third was a return of 5.6 percent.   

But when this was compared to the worst-performing funds, the difference was stark.  

The lowest performing fund with Nikko AM KiwiSaver Scheme Balanced had the worst return of 2 percent, according to the data.   

AMP KiwiSaver LS Growth Fund was the second worst with a return of 3.6 percent and Westpac KiwiSaver Growth Fund was the third worst with a return of 3.9 percent.