Are Cheaper KiwiSaver Funds the Best Performers?

Date Jul 13, 2020
Blog category Kiwisaver
By Michael Speight
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Which KiwiSaver funds are the best performers? KiwiSaver fees are one of the biggest deciding factors when people are choosing which provider and scheme to sign up to.

As a result of this, there are now many KiwiSaver providers who offer low-fee schemes to entice people to choose them. 

The main point of debate is whether a cheaper KiwiSaver fund option will actually produce better results than a high-risk, higher-fee fund.

In this blog post, we compare KiwiSaver fund types and look at whether you are better off going with a cheaper, low-risk fund or an expensive, high-risk fund.

After fees and taxes, which KiwiSaver funds perform better?

There is a common saying in the financial space: “When comparing similar funds, if all other variables are equal, cheaper should mean better.”

However, research conducted by financial institutes have stated otherwise when it comes to KiwiSaver campaigns. 

 

A recent research survey by PocketWise showed cheaper isn’t necessarily better when it comes to performance.

The survey compared the performance of low and high-fee funds over five years and found, when it came to financial returns, there were only three instances where cheaper funds outperformed a high-risk fund. 

 

Rating agency SuperRatings conducted research in Australia, Hong Kong, and New Zealand which revealed low-fee funds are generally poor performers.

The key takeaway from these financial agencies is that fund fees should not be the only criteria when it comes to choosing the right provider for you. 

KiwiSaver advice: look past the account fees

When it comes to choosing the right KiwiSaver fund, you should look beyond the account and admin fees.

While fees are one of the main deciding factors when choosing the right fund for your circumstances and goals, you should always consider other factors as well. 

Choosing the right KiwiSaver fund is more than just looking at the admin fees.

You should take into consideration the return on investment in the long run, as it could be the deciding factor between purchasing your dream home early and having a superb retirement nest egg.  

How can I compare KiwiSaver funds and get the full picture?

Besides KiwSaver fees, which other factors should I compare? When it comes to KiwiSaver comparison, you should look at fees, return on investment, as well as the level of risk associated.

Everybody is different in their financial situation and what their goals are.

If you are looking to save for your first home deposit, you may want to choose a growth account to gain more from your investment.

People looking at retirement savings may want to look at other options. 

 

With glimp, we make it easy for you to gain an overview of KiwiSaver funds from the best providers. Compare KiwiSaver funds today and find the best one for you. 

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