Not all KiwiSaver funds are delivering the same results, and the latest performance data shows some significant differences in returns and fees. In a recent episode of Cheques and Balances, James Blair and Michael Vincent unpack the best and worst KiwiSaver funds in 2026, what the rankings actually tell us and why choosing the right fund involves more than simply chasing the highest return.
What the latest KiwiSaver funds reveal about fees
One of the clearest trends across KiwiSaver funds is that paying more doesn’t necessarily mean getting better performance.
Looking at the balanced category, the average fee among the top 10 performing funds was 0.57%, compared with a category average of 0.76%. James says the same pattern appeared across growth and aggressive funds, where the top 10 were around 0.25 percentage points cheaper than the average.
On the surface, a difference of 0.2% or 0.25% might not seem significant. But KiwiSaver is a long-term investment, and those fees are charged year after year.
Moving from a 0.5% fee to 0.75%, for example, represents a 50% increase in the amount being paid in fees. Over a long investment timeframe, that difference matters.
That doesn’t mean the cheapest KiwiSaver fund will automatically be the best option. Some more expensive funds have strong track records, while different providers use different investment strategies.
The important point is to understand what you’re paying and what you’re receiving in return.
Which KiwiSaver funds are performing best?
Looking across the balanced, growth and aggressive KiwiSaver funds discussed in the episode, Kernel was sitting at number one in all three categories.
Its fee was 0.25% across the funds, with the rankings based on after-fee returns. As Mike points out, after-fee performance matters because it reflects what investors actually receive rather than a return before the provider’s fees are deducted.
Another strong performer highlighted was QuayStreet’s Socially Responsible Investment Fund. With a fee of around 1%, it was one of the more expensive funds among the top performers discussed.
However, James points out that performance rankings don’t tell the whole story. It’s also important to understand what a fund is actually invested in and whether particular investment decisions have helped drive its recent returns.
In QuayStreet’s case, James noted its exposure to US technology companies. While that positioning had contributed to its performance, investors still need to consider the risks behind a fund’s strategy and whether those results can continue over time.
How are the banks performing?
AMP and ASB also appeared around third and fourth in the rankings discussed, with fees of approximately 0.79% and 0.65% respectively.
Mike noted that ASB’s performance appeared to have improved significantly, while James described it as the strongest performer among the banks in the data they were reviewing.
Fisher Funds presented an interesting comparison.
Its default fund was performing relatively well with a fee of 0.37%, while James noted that some of its other funds were performing poorly. He described the strategies as looking significantly different, with the default option designed as a lower-cost solution.
In the aggressive category, Simplicity’s high growth fund also featured, with a 0.24% fee and a 16% return over the period being discussed.
Generate rounded out the top five in the aggressive category. James highlighted its strong longer-term track record, particularly given that it is a higher-fee option at 1.25% per annum.
Does paying higher KiwiSaver fees deliver better returns?
The data discussed in the episode raises a straightforward question: if you’re paying a significantly higher fee and your fund isn’t among the stronger performers, what exactly are you paying for?
Higher-fee active fund managers generally aim to outperform the market. They employ more people and fund managers, which contributes to the additional cost.
There will be periods where active strategies outperform passive ones and periods where the opposite happens. But James points out that, over the long term, outperforming the additional fee can be difficult.
The three-year results discussed in the episode certainly don’t suggest that paying more guarantees a better return.
That still doesn’t mean investors should automatically move into the cheapest available fund. Fees are only one part of the decision.
Your risk profile matters more than your provider
While provider rankings attract attention, James believes there is something more important than choosing the provider sitting at number one: making sure you are invested at the right level of risk.
The episode focuses on three broad fund categories.
A balanced fund is roughly 60% invested in shares and property and 40% in cash and bonds. A growth fund increases that to around 80% in shares and property, while an aggressive fund can hold approximately 95% or more in shares and property.
Taking more investment risk creates the potential for higher returns, but it also means accepting greater volatility.
James says getting your risk profile right can have a greater impact on your long-term outcome than the provider itself. Investors then need to consider what type of strategy they want, whether that means socially responsible investing, prioritising low fees or paying more for a manager they believe can outperform over time.
Don’t chase the latest top performer
Seeing another KiwiSaver fund outperform yours can make switching tempting, but constantly changing providers can create another problem.
Mike points out that investors can end up jumping between funds because they become nervous during a market drop or because they continually chase whichever fund has recently generated the highest return.
Over the long term, he says the data shows that more chopping and changing can lead to worse outcomes.
James also wouldn’t recommend changing provider based solely on three-month or 12-month performance. Even three years can be relatively short when assessing an investment designed to potentially remain in place for decades.
Past performance also isn’t an indicator of what a fund will deliver in the future.
How to check if your KiwiSaver is performing
For anyone wondering whether their KiwiSaver is doing a good job, James recommends starting with the data.
Lighthouse has created a KiwiSaver comparison tool that allows users to select their current provider and fund and compare its historical performance and fees against other options.
The goal isn’t to tell investors to immediately switch into whichever fund appears at the top.
Instead, it provides a starting point for asking whether your current KiwiSaver deserves a closer look.
That can be particularly useful when provider advertising makes almost every fund appear to be a top performer in one category or another.
If you don’t feel confident making that assessment yourself, James recommends speaking with a KiwiSaver adviser who can consider your individual situation and provide a personalised recommendation.
The bigger point is to engage with your KiwiSaver rather than treating it as something to set and forget. James gives the example of someone earning $100,000 a year from age 25 potentially paying around $170,000 in provider fees by age 65. Providers can help investors make money over that period, but it’s important to make sure they’re doing a good job.
Key takeaways
- The latest KiwiSaver funds data discussed in the episode shows lower-fee funds performing strongly across several categories.
- Kernel ranked first across the balanced, growth and aggressive categories discussed, with a 0.25% fee.
- Paying a higher fee doesn’t guarantee stronger KiwiSaver returns.
- Rankings alone don’t tell the full story. The underlying investments and strategy behind a fund also matter.
- Choosing the right risk profile can be more important than choosing the provider currently sitting at the top of the rankings.
- Higher-risk funds can offer greater potential returns, but investors need to be comfortable with the additional volatility.
- Avoid switching KiwiSaver funds simply because another provider has performed better over a short period.
- Fees can add up significantly over decades, making it important to understand what you’re paying for.
- The simplest approach is to keep fees in mind, choose the right asset allocation, select a provider you believe in and avoid unnecessarily jumping between funds.
Next steps
Use Lighthouse’s KiwiSaver comparison tool to see how your current fund stacks up, or speak with a Lighthouse KiwiSaver adviser for a personalised recommendation.
If you’d like to watch more, check out this episode below.
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Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
