August is Money Month, and reviewing your KiwiSaver should be at the top of your financial to-do list. With more than 30 KiwiSaver providers and hundreds of fund options in New Zealand, many people simply don’t know how their chosen fund stacks up against others.
Morningstar publishes a detailed quarterly KiwiSaver report that groups funds into categories such as Conservative, Balanced, Growth, and Aggressive. This makes it easy to compare similar funds directly. The report shows performance across multiple timeframes: 3-month, 1-year, 3-year, 5-year, and 10-year periods.
While past results shouldn’t be your only consideration when choosing a KiwiSaver provider, understanding your fund’s performance is crucial. Other important factors to consider include:
– Quality of customer service
– Clarity of data presentation and reporting
– Usefulness of website tools for financial decision-making
– ESG investment strategies for portfolio alignment with personal preferences
– Fee structure
When comparing providers, focus on longer timeframes rather than short-term results. Three years should be your minimum evaluation period, with longer timeframes providing more reliable information. Funds with low fees, broad diversification, and index-like investing approaches tend to perform well over time and often rise towards the top of performance rankings.
The Morningstar report shows that major banks dominate in terms of assets under management. However, these bank-provided funds currently aren’t top performers and don’t offer the lowest fees. It is likely that many Kiwis have chosen their everyday bank’s KiwiSaver option for convenience without knowing about performance metrics, fee structures, or the wide range of alternatives available. Also, most people probably don’t realise how easy it is to switch between providers.
More competition in the KiwiSaver market would likely drive down fees, improve service, enhance advice, and ultimately lead to better outcomes for investors. Ask yourself: Do you know what you’re paying for your KiwiSaver, what returns you’re receiving, and how these compare to other providers in the same fund category?
Taking a little time to review your KiwiSaver today could make a huge difference to the portfolio balance available to you once you reach retirement age. You can start by taking our KiwiSaver Quiz!
If there is one thing you do this money month – review your KiwiSaver!
