KiwiSaver's biggest money earners

New research has revealed which KiwiSaver funds have made the most money for savers. Photo/Janna Dixon.

New research has revealed which KiwiSaver funds have made the biggest dollar returns for savers over the past five years taking into account both fees and investment performance.

Australian research firm SuperRatings based its analysis on a person earning $50,000 who already had $20,000 saved in their KiwiSaver account at the start of the five years and contributed at a rate of 3 per cent per year with 17.5 per cent tax.

It then factored in the actual fees charged and investments returns of that specific fund.

Milford Asset Managements growth KiwiSaver fund topped the growth category delivering $20,395 in net benefits to investors over the past five years.

It's nearest competitor - the OneAnswer KiwiSaver scheme run by ANZ bank gave a net benefit of $15,091, followed by the Aon KiwiSaver scheme which gave $14,975.

The net benefit to those invested in growth funds was nearly double that of those in the lower risk conservative category where much of New Zealand's KiwiSaver money is sitting.

The best of the conservative funds was the Aon KiwiSaver scheme's conservative fund which had a net benefit of $8164.

Second was the SuperLife KiwiSaver scheme's conservative fund which gave $7182 followed by the Fisher Funds Two KiwiSaver fund (the former Tower-run default scheme) - conservative whose net benefit was $6597.

SuperRatings chief executive Kirby Rappell said the range in the net benefits showed there were a number of providers making a real difference to members' balances.

"It is also important to point out that some of the funds with high net benefit values are not necessarily those offering the lowest fees."

The fees versus investment returns debate has been running hot in the industry with the entry of low cost KiwiSaver provider Simplicity into the market.

It has only been running for a year which means its data is not included in the research.

Government and industry regulator the Financial Markets Authority has also been focused on fees.

Next year KiwiSaver providers will have to give the dollar value of the fees they are charging in the annual members statements which come out around April and May.

The move has sparked a warning from the New Zealand Shareholders Association that people will just compare the dollar amount of their fees without taking into account how much money they have in their KiwiSaver accounts.

The saved amount is important because a large portion of the fees is a percentage charge which is based on this.

The association wants both the dollar amount and the percentage figure to be in the statement.

Rappell said when it came to assessing the value of a KiwiSaver scheme the issue of fees could distract from the broader picture and may even prompt members to switch into a lower value scheme.

"...a single-minded focus on fees creates the danger that members overlook value to the detriment of their savings".

"Fees are not the sole determinant of value, and in fact our research shows that those funds providing the highest net benefit are not always the ones with the lowest fees."

Investment experts also warn against judging a fund on its returns alone as past performance is not a reliable indicator of future performance.