How to compare KiwiSaver funds without falling for the marketing.

The hierarchy of what matters

In rough order of how much it will shape your retirement balance, here is what to look at when comparing two KiwiSaver funds:

1. Asset allocation (most important). Stocks vs bonds vs cash. This single decision will explain ~80% of the difference in returns between two funds. Get this right and everything else is small. Get it wrong and nothing else can save you.
2. Total fees, expressed as a percentage of your balance. Over 35 years, a 0.5% fee difference compounds into roughly 12-15% less retirement balance (illustrative, depends on returns and balance trajectory).
3. Returns net of fees, over the longest available window. 5-year and 10-year, not 1-year. Look at the period that includes a downturn.
4. Manager track record and stability. Same management team for 10+ years? Or three turnovers? Funds with stable senior teams tend to deliver more consistent results.
5. Member experience. Can you actually log in and see your balance? Can you change settings without a phone call?

1 · Asset allocation

The first decision is "growth vs balanced vs conservative." This isn't a marketing label; it's a description of how much of your balance is in shares (growth assets) vs bonds and cash (income assets).

1. Conservative: ~20% growth / 80% income. Lower expected returns, much lower volatility. Right for: people within 5 years of withdrawal who can't afford a market dip to reduce their balance.
2. Balanced: ~50/50. Middle ground. Right for: people 5-15 years from withdrawal, or anyone uncomfortable with the volatility of growth.
3. Growth: ~80/20. Higher expected returns, larger temporary drops. Right for: people 15+ years from withdrawal, or anyone with the temperament to ignore a 25% paper loss.
4. Aggressive: 95-100% growth. Right for: long horizons and strong stomachs only.

The biggest cost we see is not "wrong fund", it's "right fund, wrong life stage." 40-year-olds on Conservative because they joined Conservative at age 21 and never changed it. Get the allocation right for your horizon first, then optimise within that band.

2 · Fees

Fees are quoted three different ways, which is why people give up reading.

1. Total Annual Fund Charges (TAFC), the single number that matters. Expressed as a percentage. As of 2026 the range is roughly 0.4% (passive index) to 1.5% (active management). The Sorted KiwiSaver Fund Finder publishes TAFC for every fund.
2. Member fee, a flat dollar amount per year, typically $20-$50. Negligible on a $50k balance, irrelevant on a $200k balance.
3. Performance fee, extra charge if the fund beats a hurdle. Read the hurdle definition. A "high water mark" rule (only earn the fee when you exceed your previous peak) is more aligned than a "calendar-year benchmark" rule.

Rule of thumb: at the same allocation, a fund charging 0.5% should beat a fund charging 1.2% over 20+ years more often than not, simply on fee drag. The active fund needs to outperform by 0.7% per year, every year, after fees, to break even. Most don't.

3 · Returns

The fact-sheet trap: managers prefer to show whichever period flatters them most. If the recent 12 months were strong, you'll see 1-year prominently. If 1-year was weak, you'll see 5-year.

1. Compare net of fees, not gross. Some fact sheets show gross returns in big numbers and net in small print.
2. Look at 5-year and 10-year, not 1-year. One year is mostly noise.
3. Make sure you're comparing same-allocation funds. A growth fund "beating" a balanced fund tells you nothing, that's expected in rising markets and reversed in falling ones.
4. Look for a downturn in the window. The 10-year window covers 2018-2023 which includes the 2020 dip and the 2022 bond drawdown. A fund that held up well in both is worth more than one that has only known up-markets.

4 · Manager track record

1. How long has the senior team been in place? Stable teams correlate with consistent process.
2. What's their philosophy? Passive (track an index, low cost), active (try to beat the index, higher cost), or "core and satellite" (mostly passive with active tilts)?
3. Have they had a major incident? A breach with the FMA, a public underperformance, a fund closure.
4. Do they own KiwiSaver businesses elsewhere? A manager whose KiwiSaver is a side product to their bank can deprioritise it. A specialist KiwiSaver manager treats it as the main thing.

5 · The number nobody puts on the front page

It's called the tracking error, or for active funds, the active share. It tells you how different the fund is from the underlying index.

If you're paying active fees (1%+) and the fund's holdings are 80% identical to the cheap index fund, you're paying for nothing. Some "active" funds in the NZ market have active share below 40%, meaning more than half their portfolio is essentially the index.

You will not find this on a fact sheet. You will find it in the annual disclosure document, or you can ask the manager directly. If they refuse, that's information too.

The 4-fund shortlist process

1. Decide your allocation band (conservative / balanced / growth / aggressive).
2. Use Sorted KiwiSaver Fund Finder to filter every fund in that band by TAFC. Note the lowest 4-5.
3. Add 1-2 active funds with strong long-term track records, even if more expensive. Note these.
4. For your 6-fund shortlist, pull the latest fact sheet and the latest annual disclosure document.
5. Eliminate any fund with: a TAFC above 1.3% (unless active share > 60%), a senior team change in the last 2 years, or a public FMA breach.
6. Of the 3-4 remaining, pick the one with the lowest fee for the allocation you want.

What about ethical / green / responsible funds?

Worth doing if you care, but read the screening rules. "ESG-screened" can mean anything from "no tobacco and no weapons" to "fully aligned with Paris Agreement scenarios." The fees are usually slightly higher (10-20bps). Returns have been roughly similar to non-ESG over the last 10 years, but the future is unknowable.

How often to revisit

Once a year, look at your fund's annual report. Three triggers to switch:

1. The fee has gone up.
2. The senior team has changed.
3. Your life stage has changed (10 years left? Shift down a band).

Otherwise, don't switch. Switching for short-term performance is the single most common mistake we see and it costs people roughly 1-2% per year in mistimed moves.