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The Growth Fund’s 10-year Morningstar ranking: a discussion with Simplicity CIO
Where this came from: This blog summarises “Simplicity Growth Fund tops KiwiSaver peers over 10 years” by Andy Macdonald, Senior Reporter at BusinessDesk, published on 9 November 2026. You can read the full article here. The article sits behind the BusinessDesk paywall, so you’ll need a subscription to read it in full.
The Simplicity KiwiSaver Growth Fund ranked first for 10-year returns among 19 funds in Morningstar’s Growth category for the September 2026 quarter. It returned 9.9% a year over that period. Speaking to BusinessDesk, our co-founder and Chief Investment Officer Andrew Lance said the result reflects a low-cost, index-following approach, with a few carefully managed additions to the investment mix.
What did Morningstar’s latest report show?
Morningstar’s KiwiSaver 360 quarterly report for the September 2026 quarter is the first in which our Growth Fund has a full 10-year track record. The fund launched on 1 September 2016. Over 10 years it returned 9.9% a year, ranking first among the 19 funds in Morningstar’s Growth category. It also returned 15.5% a year over three years, in the number one spot ahead of its 31 Growth category peers.
“It’s our first year of ranking as a 10-year [fund], and so we’re pretty thrilled,” Andrew told BusinessDesk.
Andrew was also clear that three years is too short a period to draw firm conclusions from. Ten years is a far more meaningful test of an investment approach.
How does the Growth Fund invest?
The core idea is simple. We regularly look at the average asset allocation of leading KiwiSaver managers, remove the outliers, and use that as the basis for the Growth Fund’s target mix. Where we think there’s value in doing something a little different, we will. Otherwise, as Andrew put it, “generally, we’d rather follow the index”. In Andrew’s view, the 10-year result supports the thinking Simplicity started with: that passive investing will ultimately win over active.
As at 30 September 2026, the fund held $3.2 billion for 45,395 KiwiSaver Growth Fund members. Around three-quarters of the target mix is in shares, with 58.1% in international shares and 13.3% in Australasian shares. The rest is spread across unlisted property (8.6%), NZ fixed interest (9.8%), international fixed interest (6.3%) and cash (4.0%). International assets are managed by Germany-based DWS Group, and Simplicity manages the NZ assets. Simplicity’s environmental, social and governance (ESG) criteria mean some exclusions are applied – these are detailed in our Responsible Investment Policy, which can be found on our ethical investing page.
The fund’s annual fee is 0.23% - lowered from 0.24% on 1 October 2026, with no annual administration, transaction or performance fees.
What does the fund do a little differently?
Most of the Growth Fund is invested in listed shares and bonds. Andrew highlighted three smaller allocations that set it apart.
- Private equity. About 1.8% of the fund was invested in NZ private equity at 30 September. This includes several Icehouse Ventures funds, direct stakes in companies such as Data Torque, The Pure Food Co and Tax Traders, and more recently a fund managed by deep-tech investor Bridgewest Ventures. Andrew described it as “a great strategy for us, just at the margin.”
- Unlisted property. The fund holds shares in Simplicity Living, a related entity that develops and runs build-to-rent homes, through a wholesale property fund. Property can’t be sold quickly, so Andrew noted the fund is “very constrained” in how much it can invest there.
- First-home mortgages. About 2% of the fund is invested in a Simplicity-managed wholesale mortgage fund, held within the fixed interest allocation. It provides home loans to Simplicity members buying their first home.
Andrew believes these investments have helped performance at the margin. That’s his view as CIO, not a formal analysis of where the returns came from.
How is liquidity managed?
Unlisted investments like private equity, property and mortgages carry extra risks, including that they can’t be quickly turned into cash. Residential mortgages generally can’t be sold quickly. We manage this through detailed liquidity rules across the whole fund. Cash and fixed interest are treated as fully liquid, and international shares can typically be sold within days. The fund’s supervisor, Public Trust, keeps an eye on these arrangements. “We have to make sure that we’ve got liquidity elsewhere to cover ourselves,” Andrew said.
So what does this mean for members?
A 10-year ranking is a nice milestone, and we’re proud of it. But it’s a look backwards, not a promise about what comes next. Markets will have good years and tough ones, and returns can be negative.
What we can control is keeping fees low, staying diversified, and sticking to an approach built for the long term. For KiwiSaver members, time in the market and the right fund for your timeframe usually matter far more than any one quarter’s results.
TL;DR
- The Simplicity KiwiSaver Growth Fund ranked first for 10-year returns among 19 funds in Morningstar’s Growth category (September 2026 quarter).
- It returned 9.9% a year over 10 years and 15.5% a year over three years.
- The approach is mostly index-following, with small allocations to private equity, Simplicity Living and first-home mortgages.
- Liquidity risk from unlisted investments is managed across the whole fund.
- The annual fee is 0.23% from 1 October 2026, the lowest amongst its peers in the Morningstar 360 report.
*Editorial note:
Originally published by BusinessDesk on 9 November 2026. Some figures and comments in the original article reflect information available at that time. Updated target asset allocations and the revised SIPO are due to be published on 1 December 2026.
