Some time back I was asked on Facebook if there was a way to easily compare apples with apples when it comes to KiwiSaver funds and providers.
Comparing the returns and fees is important regardless of the amount you have invested.
Because of the complicated nature of KiwiSaver and its different types of funds, a simple comparison chart would never work.
The New Zealand Retirement Commission’s Sorted website does have a good comparison tool.
You can either answer questions, and the site calculator will offer some fund suggestions, or you can search and sort by fees and/or performance.
The Inland Revenue Department website also has a list of all current KiwiSaver providers.
It appears that there is no simple way to work out which is the absolute best fund and it’s just going to take some time to research all of your options.
A couple of things that jumped out at me when looking at the Sorted website..
- Providers charge a fixed annual fee of between $0 and $60 per year. This has a relatively large impact on your savings if you only have a small balance. e.g. a child’s account with only $1,000 in it is likely to be eaten away by a $60 annual fee if the fund is not performing well.
- Providers charge a percentage of your account balance per annum. Ouch! The larger your balance, the more $$ your provider takes each year. No wonder banks are frantically competing with each other to transfer existing funds over to their management.
Be aware when choosing a fund that there are different levels of growth or conservativeness that you can choose from.
Funds under management offer volatile returns by their very nature. Returns will vary from one year to the next. This also makes it very hard to compare apples with apples when choosing a fund.
Note that I am not a financial advisor, and do not have KiwiSaver myself. I am a sceptic, control freak, and enjoy researching things thoroughly.