Compare our Generate KiwiSaver Scheme funds

It’s easy to get confused by different fund types, so here’s a handy cheat sheet to help you compare Generate KiwiSaver Scheme funds, returns and fees to find the best option for your savings goals, risk tolerance and investment timeframe.

The first step towards a better financial future is signing up for a KiwiSaver account – if you’ve got that far, well done! But another important step is choosing the KiwiSaver fund type to invest in – this can make all the difference in the long run. 

The basic principles of KiwiSaver fund types

To put it very simply, the main way KiwiSaver funds vary is by how risky the investment could be, and its expected returns over time.

As a general rule, a fund that we’d term ‘conservative’ or ‘moderate’, generally has less risk. Because the risk is lower – the expected returns are also slower and steadier, with less variation. 

By the same token, a fund that we’d term ‘growth’ or ‘aggressive’ would typically be considered ‘riskier’ as it might experience more ups and downs, but, especially over the long term, these kinds of funds have potential for higher returns.

A ‘balanced’ fund might be somewhere in between.

How time-frame matters

Because a KiwiSaver account is primarily a retirement savings plan that you access at age 65, it’s considered a long-term investment. (An exception is a first-home withdrawal. However, after this withdrawal most members will continue contributing until retirement age.)

Because it’s a long-term investment, that means, as a general rule, you could be comfortable taking on more risk. While a growth or aggressive fund may have short-term ups and downs, over the long term these typically smooth out, so the risk is minimised.

You would probably not choose a growth fund if you were making a short-term investment (unless your tolerance for risk is high).

However, for people who are just starting out with KiwiSaver in their 20s or 30s, a growth fund is usually the right choice for the long term. This can even be the case for people who join when they are older, so long as they have more than 10 years ahead of them before they plan to retire.

For more information on growth funds, click here.

It’s always a great idea to talk to a KiwiSaver adviser about your personal preference for risk. You can also take our quick quiz to see which Generate KiwiSaver Scheme fund is right for you, based on your risk tolerance.

Take our quiz to see your risk profile.

How Generate KiwiSaver Scheme funds target different risk and return levels

Income assets are generally lower risk, while growth assets are generally higher risk.

Income assets are things like cash and fixed interest (e.g. bonds). Growth assets are things like property and infrastructure and equities (also known as shares).

A conservative fund will contain far more income assets than growth assets, while for an aggressive fund it will be the other way around.

Read more about the difference between growth and income assets here.

Generate KiwiSaver Scheme’s funds

Generate currently offers six KiwiSaver options with different levels of risk and potential returns: Defensive, Conservative, Moderate, Balanced, Growth and Focused Growth (aggressive). Our members can invest either entirely in one fund or spread their investment across multiple funds.

For more details about the six funds, such as their specific asset allocation and fees, see page 13 of our Supplementary Brochure. 

Every Generate KiwiSaver Scheme fund has an administration fee of $36 per year. 

In addition, members incur an investment management fee that’s an annual percentage of the fund’s value. This fee typically increases in line with the potential returns, as well as the skill involved in managing the fund more actively.

Both of these fees (administration and investment management) are automatically factored into your KiwiSaver account - you are not billed and don’t have to make any payments.

The table below shows our current fund fees. See the disclaimer at the end of this page for more information on how fees are calculated.

Net returns are the key measure

Some KiwiSaver schemes tout their low fees. But fees only tell part of the story. If a fund is not providing good returns, it won’t give the best financial outcome, despite lower fees.

The best measure to look for is net returns – the returns on your KiwiSaver investment, minus any fees.

This chart shows a simple example of the concept – Fund B has higher fees, but because it also offers higher returns, it provides the best net return.

Why your KiwiSaver fund type matters

Net returns (returns minus fees) can vary dramatically depending on the fund type that you choose.

It’s easy to see the different results you might get by using our handy KiwiSaver Calculator.

By keeping your contribution amount the same, but choosing different fund types, you instantly see how much of a difference your fund type can make.

Our calculator shows results on a graph like this.

For this example, the person starts KiwiSaver with zero balance at 30 years old, is employed, earning $50,000 per year, contributing 3%, with the employer contributing 3% and not making any one-off payments. These are the default settings in our KiwiSaver calculator, which you can adjust to suit your circumstances.  

Try our KiwiSaver calculator

Please note this calculator uses projections based on assumptions, which are detailed at the bottom of this page. 

Remember, ups and downs smooth over time

Don’t be too active and interested in your fund performance, especially if you are in a more active growth fund. KiwiSaver is an investment, not a bank account, so checking on your balance too often especially during times of global instability can be scary.

Generate encourages all their members to be actively engaged in their fund choice, which is why they offer no-obligation adviser meetings to help Kiwis understand all their options, before making a decision.