Should I just choose a KiwiSaver fund with the lowest fees?

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Your KiwiSaver provider may charge you many different types of fees such as account membership, management, performance, and administration fees. These are combined into one small percentage amount, excluding any fixed fees, such as an annual membership fee. The amount charged varies between providers and their different types of KiwiSaver funds.

It is important to keep an eye on fees, as even a small percentage difference can cause a considerable change to your net (after fees) returns. Some Kiwis may only take fees into consideration when comparing different KiwiSaver funds and subsequently pick a fund with the lowest. This is not always the best idea, as there are many other factors that need to be considered.

Returns after fees

Rather than only looking at the amount of fees you are being charged, it is better to also take a look at the past returns once total fees have been deducted. The table below compares the fees and returns of five growth/aggressive funds.

Growth funds

Asset based fees

Gross Returns (5 year average)

Returns after fees

Booster High Growth




Kiwi Wealth Growth




Mercer Growth




Superlife Growth




OneAnswer Growth




Source: MorningStar KiwiSaver report - Sep 2020

While it may be tempting to pick a KiwiSaver fund with the lowest fees, as we can see above, it does not always give you the best result. If we look at returns after fees in this example, the fund with the highest fees seems to also have the better performance than others within the past 5 years. Therefore, it may be worth paying higher fees if the provider delivers a greater after-fee performance. In saying this, it is also important to remember that past returns do not always guarantee future returns.

A helpful method to make sure you aren't being overcharged is to compare and check that your KiwiSaver fees aren't too high above the average. You may also want to look into what you are actually paying for, as services differ from provider to provider.

What the fees are paying for

Some providers may charge higher fees to members as they include the costs of having readily available financial advice. Additionally, funds may be actively managed, whereby analysts, researchers, and managers buy and sell assets to try and achieve better returns than the market. The high fees could also simply be paying for more experienced investment managers, their expertise and services.

When you are looking to buy a car, you don’t just walk into the store and ask for the cheapest car. You, instead, make sure you aren’t overpaying for the car and are buying the quality that you require. This is essentially about getting what you are paying for and could be one explanation for the varying KiwiSaver fees.

More factors to look into

Looking at the fees, returns, and services offered is an important step to take before you pick a KiwiSaver fund, but it shouldn’t stop here. There are many other factors you need to take into account before making an important financial decision.

National Capital specialises in KiwiSaver and Investment research and is here to help you figure out the right type of KiwiSaver fund for you. Our financial advisers include your situation, financial goals, investment timeframe, volatility tolerance, and other important factors in the selection process to make sure that we are recommending the most suitable fund. Submit our KiwiSaver HealthCheck to get free and personalised KiwiSaver advice.

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Do not only look at the fees and past returns when you are comparing different funds together. Make sure that you are in the right fund type by taking our KiwiSaver HealthCheck.

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