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Do higher KiwiSaver fees deliver better returns?
Published on 31/08/2026
New research by Simplicity’s Chief Economist, Shamubeel Eaqub, has found that over the past 10 years, across all KiwiSaver funds, higher fees did not on average buy higher net returns.
And on an asset-weighted basis, higher-fee funds, on average, underperformed lower-cost funds after fees.
The analysis, the first look at fund performance including fees since Simplicity entered the market a decade ago, echoes findings from global SPIVA research (S&P Indices Versus Active), which shows that active fund management does not, on average, outperform passive fund management.
Across all KiwiSaver funds, when fees are taken into account, returns to savers over the past 10 years were, on average, the same whether the fund was an active manager charging more than 1% per annum or a passive, lower-fee provider charging around 0.25%.
Asset-weighted net returns for higher-fee managers were, on average, lower than those achieved by low-fee managers.
“On average and over time, paying more for your KiwiSaver bought nothing extra,” Shamubeel says. “The data also shows that past performance is no indicator of future performance. Over the decade, of the top quarter of funds in one year, only a third were still in the top quarter five years later.”
Why fees matter
The research was undertaken as Simplicity turned 10, announced its eighth fee cut to 0.23% per annum* and reached 200,000 members.
When Simplicity launched in 2016, funds charging less than 0.5% a year made up just 6% of KiwiSaver funds. Today, that’s more than one in five. But funds charging 1% or more still manage approximately $53 billion, around a third of all KiwiSaver money.
As KiwiSaver balances grow, the dollar amount members pay in fees grows too. Across the industry, KiwiSaver fees are expected to exceed $1 billion this year.
Simplicity Managing Director Sam Stubbs says the research reinforces the importance of making sure members benefit from the economies of scale that come as KiwiSaver grows.
“What this research shows is that active investing with higher fees does not guarantee higher returns,” he says.
Simplicity believes there is a wider conversation to be had about whether KiwiSaver fees should be capped, and whether a levy on higher fees could help fund financial education, financial planning and hardship support.
What does this mean for you?
Shamubeel says there are some simple lessons KiwiSaver members can take from the research.
“Returns can be random, but you can control how much you pay in fees,” he says. “Pick the fund type that suits your time horizon and appetite for risk, don’t count on higher returns just because you’re paying higher fees, and don’t switch funds based on past performance.”
That doesn’t mean there aren’t skilful active fund managers. Some clearly are, and not every low-cost fund will outperform every higher-fee fund.
But over the past 10 years, the research suggests that, on average, paying a higher fee has not translated into a better return for KiwiSaver members.
And that’s why we think fees are one of the things worth paying attention to. Unlike future investment returns, they’re something you can know in advance.
Download the full report here - Do higher fees give better returns?
Note: Fee reduction to 0.23% applies to the Diversified KiwiSaver and Investment Funds, not to the Single Sector. Investment Funds and is effective from 1 October 2026.
Returns: Disclose Register fund updates, March 2017 to June 2026 - after fees and 28% PIR tax, years to 31 March - compared within fund type; 465 funds and 2,910 fund-years, including funds that have since closed; fees as filed in each year (consolidated register files, register exports and the Disclose API).