Final quarter of 2023 sees KiwiSaver reach $104 billion

Market movements saw KiwiSaver assets grow $8 billion in the last quarter of 2023, ending the year at $104 billion according to Morningstar’s latest data.

Average multisector category returns for the December quarter ranged from 4.9% for the conservative category to 7% for the aggressive category. Default options averaged 6.3%.

All KiwiSaver providers, with the exception of two, produced positive returns over the December quarter, with most north of 5%.

Of the default funds, Simplicity, which made a small fee cut (0.29 to 0.25%) this month, had the best return of the quarter at 6.8%; for the 12 month quarterly result it shared first place with KiwiWealth, both returning 13.7%.

Morningstar analyst Greg Bunkall says Quay Street continued to perform well across many time periods in the conservative and balanced categories.

Milford had consistently high performance within the moderate, balanced, and growth categories over the long term, though it struggled in 2023 coming in at 17th, 22nd and 11th place across the three categories.

At the outer margins, the highest performer for the quarter (47.9%) and for the 12 months (149.3%) was Kōura’s Carbon Neutral Cryptocurrency fund, although at $2.7m in assets its impact on the market is negligible.

The lowest quarterly return of -7.2% was from Kernel’s S+P Kensho Electric Vehicle Innovation fund ($0.3m), and proving that it was not a good year for clean energy stocks, Kernel’s S&P Global Clean Energy fund ($0.7m) had the lowest 12 month quarterly performance at -14.9%.

Over 10 years, the aggressive category average has given investors an annualised return of 8.3%, followed by growth (7.9%), balanced (6.4%), moderate (4.6%), and conservative (4.3%).


KiwiSaver assets in the Morningstar database increased during the December quarter from $96b. Providers took an estimated $818 million of annual fees, with an average of 0.79%. This was up from $761m in the September quarter, when the average was also 0.79%.

Bunkall says consumers now have a wide range to choose from when it comes to fees.

ANZ led the market share (19.5%) with more than $20.3b, followed by Fisher (15.4%) with $16b. They were followed in order by ASB, Westpac’s fund manager BT and Milford.

The five largest KiwiSaver providers account for approximately 68% of assets in Morningstar’s database and generated around 69% of the fees. This led the other 24 providers surveyed scrapping it out for 32% of the market, with Bunkall saying some KiwiSaver providers are sub-scale right now.

Quarter on quarter there was some minor jostling further down the ranks with ethical fund manager Pathfinder climbing from 19th to 17th place, Forsyth Barr dropping one from 18th to 19th, and InvestNow taking a backward step from 17th to 18th place. FANZ dropped one place, PIE funds climbed one place and the rest remained steady.


Last September Morningstar added its Global Sustainability Rating to the survey; in the growth category 20 funds received four or five globe ratings for relative environmental, social, and governance risks within their portfolios. This was up from 18 funds for the September quarter.

“Every single KiwiSaver fund these days has a sustainability policy. They have exclusions avoiding certain stocks and they have engagement policies – it's almost become table stakes in KiwiSaver and especially in the default category with some of the larger providers.”

Generate cracks $5 bill mark

Generate becomes one of the largest boutique KiwiSaver managers.

Generate has cracked the $5 billion in funds under management (FUM) mark, making it one of the largest boutique KiwiSaver providers (outside of banks).

That growth has been driven by strong long-term performance, award-winning customer service and its focus on educating and empowering Kiwis to make smart KiwiSaver decisions, chief executive Henry Tongue says. 

“Our purpose is to grow Kiwis wealth. We do that through strong long-term performance and educating and empowering Kiwis to make smart decisions with their KiwiSaver, like getting into growth funds for the long-term and contributing more than the minimum 3%," Tongue says.

As active investors, Generate have been able to take advantage of market movements, which has helped it develop a track record of strong the results.

The most recent Morningstar KiwiSaver Survey showed each of the original Generate KiwiSaver Scheme funds placed in the top two in their respective categories for 10-year performance to 30 September 2023;

  • The Generate Focused Growth KiwiSaver fund ranked 1st out of 8 funds in the Multi-sector Aggressive category
  • The Generate Growth KiwiSaver fund ranked 2nd out of 14 funds in the Multi-sector Growth category
  • The Generate Moderate KiwiSaver fund ranked 1st out of 12 funds in the Multi-sector Moderate category

Generate is also committed to achieving investor returns through responsible investment. This means it specifically excludes a number of harmful industries from its potential investments and looks for opportunities to invest in initiatives that make a difference for local communities, such as social housing developments in partnership with community groups. 

Fisher’s KiwiSaver FUM sliggish after Kiwi Wealth purchase

Fisher Funds chalked up very sluggish growth in its KiwiSaver funds under management (FUM) through the first quarter of owning Kiwi Wealth but the wholesale side of its business is growing at double-digit rates.

The latest MJW survey showed Fisher's wholesale FUM grew 14.6% to $18.36 billion between the September and December quarters of 2023.

MJW's Ben Trollip says his company's data covers all the wholesale funds its clients invest in, so the total may not include all Fisher's wholesale funds, but it does include the vast bulk of its wholesale FUM.

Not all Fisher's wholesale vehicles showed growth in the quarter – its NZ fixed interest fund, for example eased from $2.75 billion on Sept 30 to $2.73 billion – but others grew at a fast clip, including the international select equities fund which near doubled to $3.2 billion.

Fisher's KiwiSaver FUM grew just 0.38% in the year ended March 2023 – the year-earlier comparison is the sum of Kiwi Wealth's funds and Fisher's.

Among the top 10 KiwiSaver managers, that was the most sluggish growth with the exception of AMP, whose KiwiSaver FUM shrank by 0.63% to $5.8 billion.

At $14.42 billion, Fisher was the third-largest KiwiSaver manager, behind ANZ with $18.71 billion and ASB with $14.47 billion.

Growth does tend to be slower the larger a manager gets – ANZ's growth in the year was 1.03% and ASB's was 3.33%, while fourth-largest player, Westpac grew FUM at a 2.9% pace.

Milford Asset Management was the fastest growing of the top 10, increasing FUM by 17.3% to $5.65 billion.

Milford's wholesale FUM, as measured by MJW, grew 5.1% in the December quarter to $8.67 billion.

Fisher's investment style has always been a “buy and hold” strategy while Kiwi Wealth, which was started by Gareth Morgan and later sold to the Kiwibank group, was run on the belief that because most of the assets most New Zealanders own are concentrated in NZ, the KiwiSaver strategy should be to invest offshore to provide diversification.

Which is somewhat ironic since most of Kiwi Wealth's clients probably were also Kiwibank customers and had chosen to go “local” in choosing their bank.

“Swings and roundabouts” on investment returns

The results shown in MJW's survey show very much a “swings and roundabouts” returns from Fisher's own funds and the Kiwi Wealth funds.

For example, the Fisher growth fund was the second-best performer in the December quarter out of 15 funds with a 7.3% return while the Kiwi Wealth fund was fifth best performer with a 7.1% return.

The Fisher fund was 11th out of 15 funds over three years with a 3.2% annual return but third out of 13 funds over 10 years with an 8.2% annual return while the Kiwi Wealth fund was second over three years with a 5.2% annual return and seventh over 10 years with an 8% annual return.

Fisher didn't answer the question directly about how its Kiwi Wealth customers were feeling about the change in strategy, but did say both the Fisher and Kiwi Wealth funds had been run together since March 2023.

“The performance of each fund has been right near the top of the pack, driven by strong outperformance in our active equities strategies,” Fisher said.

“Fisher Funds has been very pleased with the returns generated for Kiwi Wealth clients since taking over the ownership, both on an absolute and relative-to-competitor basis,” it said.

“Given both Fisher Funds and Kiwi Wealth funds are now all invested into the same assets by the same investment team, any recent differences in performance between the two brands can be attributed to modest differences in strategic asset allocation of the funds.”

Fisher noted that growth funds are long-term investments and do experience short-term volatility.

“We are focused on delivering long-term results for our clients and we believe our active investment philosophy and approach will continue to do this.”

Fisher bought Kiwi Wealth for $310 million in November last year.

KiwiSaver – is consolidation on the cards?

KiwiSaver has finally hit a speed bump shrinking for the first time to end the September quarter at $96.2 billion. That’s down around $2 billion from June.

This was entirely due to market movements and to be expected, says Morningstar data director of Asia-Pacific Greg Bunkall.

“As a growing product, inflows have overshadowed outflow and market movements but as KiwiSaver matures we can expect market movements to have more impact leading to more ups and downs in the overall KiwiSave balance. It’s normal and to be expected.”

Market maturity means providers need to start thinking about KiwiSaver as a traditional investment product with ups and downs in market movement and no longer in terms of guaranteed revenue growth, he says.

Recently there has been a significant increase in options and providers particularly with white label funds brought onto platforms such as InvestNow and KiwiWRAP and offered as KiwiSaver.

Bunkall until this point, New Zealand hadn't had the same level of proliferation as Australia, but the trend there is reversing with the number of super funds falling from 170 to about 120. ”Regulators are really trying to increase the scale at which the super funds operate. Australia Super, for instance, is a A$263 billion fund in assets and it anticipates to be at A$500bn at 2026. QSuper and SunSuper, which were about the same size were put together and are about the same size as AustraliaSuper with similar growth aspirations.”

Bunkall says Morningstar anticipates increased scale, heightened competition, larger member balances, passive investment strategies and regulatory pressures.

Drawing insights from what we can see overseas we would expect these trends to persist and continue downward pressure on fees.

Fees reduced but expensive funds grow

In KiwiSaver multi sector categories, about $310 million worth of fees were generated in 2016, more than doubling in the last six years to around $645m.

While the industry has experienced great revenue growth, the average fee paid by members per dollar has decreased by about 9%. In 2016, this was about 87 basis points which has been reduced to 80. But that 9% decrease has been masked by investors moving into more expensive funds i.e., from conservative to growth products generally.

In 2016, conservative and moderate categories, which are cheaper, accounted for about 45% of assets under management and now make up only 27%, says Bunkall. “Investors have preferred to shift more recently into growthier, more expensive,

KiwiSaver options. That has meant a lot of the fee deductions in those more expensive categories have been negated. If we actually look into it, the average balanced category has gone down by 16% and the average growth has gone down by 22%.”

Asset allocation

Investors are starting to take note, checking their risk profile and moving towards growth funds. In 2011 overall asset allocation was 60% income and 40% growth. This is now more like 45% income and 55% growth.

This shift is not uniform across providers, though. Analysis of the banks, Milford and Fisher Funds revealed some quite varying splits with one of the most conservative providers members split 50/50, while one of the most aggressive providers coming in at 61/39 towards growth.

“A provider with 50/50 is going to have a lot of headwinds trying to generate market share compared to one focused on market progression,” says Bunkall.

Exposure to international equity ranges from 30% to 50%, NZ equities from 9%-18% and alternatives from 0%-9%.

For the September quarter the five largest KiwiSaver providers accounted for approximately 68% of assets and fees but the landscape is changing. ANZ led the market share with more than $18.8 billion followed by Fisher (15.5%) which knocked ASB back to third place. BT (Westpac) dropped to the fourth spot ahead of Milford, which debuted in the top five.

Almost all multisector KiwiSaver funds produced negative returns over the September quarter. Average returns from the multisector category after fees and before tax ranged from -1% for conservative funds to -3.1% for the aggressive category. Among the defaults, SuperLife did best, losing the least.

Over 10 years, the average annual return for aggressive funds was 8.0%, followed by growth (7.6%), balanced (6.1%), moderate (4.3%), and conservative (3.9%).

Over longer periods, Quay Street, Milford and Generate continued to perform well across the categories in most periods.