KiwiSaver Growth Funds Compared: Which Provider Delivers Over the Long Haul

A growth fund is the right answer for most KiwiSaver members under forty-five. The category is designed for time horizons of nine to twelve years or more, with the bulk of assets in shares and property — the asset classes that generate real returns over decades. The question is not whether to be in a growth fund. The question is which one.

I pulled the latest Morningstar KiwiSaver survey data — the five-year returns to March 2026 for every growth fund with a meaningful track record — and overlaid the fees. Then I looked at the gap between what the best funds return and what the average fund returns. The gap is larger than most people realise, and most of it is not about investment skill. It is about fees.

The Spread Is Real

Over the five years to March 2026, the top-performing growth fund returned 7.6% per annum after fees. The bottom performer among the major funds returned 4.1%. That is a 3.5% annual difference. Over thirty years, on a starting balance with regular contributions, that gap compounds into hundreds of thousands of dollars.

But the real story is not just about returns. It is about what you keep.

What the Data Actually Says

Here are the five-year annualised returns to March 2026 for the major growth funds, ranked from highest to lowest, alongside their annual fees. Source: Morningstar KiwiSaver survey.

Milford Active Growth: 7.6% per annum. Annual fee: 1.03%. Active management, bottom-up stock picking, concentrated portfolio.

Simplicity Growth: 7.0% per annum. Annual fee: 0.24%. Passive, index-based, non-profit trust structure.

BNZ Growth: 6.2% per annum. Annual fee: 0.75%. Bank-owned, diversified active strategy.

Generate Focused Growth: 6.1% per annum. Annual fee: 1.08%. Active management with ESG screening integrated into the investment process.

Westpac Growth: 5.6% per annum. Annual fee: 0.78%. Bank-owned.

ANZ Growth: 5.1% per annum. Annual fee: 0.80%. Largest KiwiSaver provider by funds under management.

Fisher Funds Growth: 4.1% per annum. Annual fee: 1.12%. Active management.

Two things jump out. First, the gap between first and last is 3.5% per year — that compounds into a life-changing amount over a working career. Second, fees do not consistently correlate with returns. The three most expensive funds in this list — Fisher Funds, Generate, and Milford — land at the bottom, middle, and top of the performance table respectively.

The Fee Difference, Compounded

On a NZ$100,000 KiwiSaver balance, the annual fee difference between Simplicity at 0.24% and a typical active manager at 1.03% is roughly NZ$790. Per year. Every year. Before you earn a single cent of return.

Over a thirty-year working life with regular contributions, a one percent fee gap can compound to well over NZ$100,000 in fees alone. That is money you never see. It goes to the fund manager. Before the market does anything.

This is why the fee conversation matters. The return conversation matters too — Milford's 7.6% beats Simplicity's 7.0% even after fees — but fees are the one thing you can control with certainty. Returns come and go. Fees are permanent.

Milford Active Growth

7.6% five-year return. 1.03% annual fee. Active management with bottom-up stock analysis — meaning the team researches individual companies rather than making top-down bets on sectors or economies. Concentrated portfolio with high conviction.

Milford is the fund every other growth fund gets compared to, and the reason is the long-term record. The five-year number is the highest in the category. The ten-year record is market-leading among active KiwiSaver funds. The fund has won the INFINZ Diversified Growth Fund Manager of the Year award multiple times, including recently.

The question with Milford is not whether they have delivered — they have. The question is whether they will continue to deliver. Active management that outperforms is a skill. That skill can persist, or it can erode as the fund grows, key people leave, or market conditions shift. Paying 1.03% is a bet that the outperformance continues. So far, that bet has paid off. Past performance is not a guarantee.

Simplicity Growth

7.0% five-year return. 0.24% annual fee. Passive index-based investing. Non-profit trust.

Simplicity charges less than a quarter of what Milford charges and returns 0.6% less per year. Over five years, the return gap is small enough that the fee gap nearly closes it. Over ten years, with compounding, the race tightens further.

The fund tracks a global index with a New Zealand tilt. There is no active management, no stock-picking, no market timing. The investment thesis is that fees are the only thing you can control, so minimise them and let the market compound. For many people — perhaps most people — that thesis is compelling. The data from the S&P SPIVA report, which tracks active versus passive performance across global markets, shows that the majority of active managers fail to beat their benchmark over ten to twenty year periods.

Simplicity is structured as a non-profit trust. Any surplus goes into reducing fees, not into shareholder dividends. That is a structural feature, not a marketing claim, and it means the fee you pay today is likely the ceiling, not the floor.

BNZ Growth

6.2% five-year return. 0.75% annual fee.

BNZ is the best of the bank-owned growth funds on cost by a clear margin. The returns are mid-pack — better than ANZ and Westpac, behind Milford and Simplicity — but the fee is competitive enough that the net outcome is reasonable. This fund is not designed to top performance charts. It is designed for people who want their KiwiSaver, mortgage, and transaction account in the same banking app, and do not want to pay an unreasonable price for that convenience.

The Bank Funds

ANZ and Westpac charge between 0.78% and 0.80% and returned 5.1% and 5.6% respectively over five years. These are not bad funds. They are average funds charging above-average fees for average performance. They benefit from a default enrolment arrangement that makes them the largest providers in the country by member count. A default fund is better than no fund, and inertia keeps most members where they are. But neither ANZ nor Westpac makes a compelling case against Simplicity, BNZ, or Milford on the numbers that matter.

The Conversation Worth Having

If you are under forty and choosing a growth fund, the decision framework is simpler than most people make it. Start with the lowest-cost option — Simplicity or Kernel at under 0.30% in total fees. If an active manager like Milford continues to outperform by a meaningful margin over rolling five-year periods, the case for switching exists. But make the active manager earn your business. Do not pay them upfront on the assumption of outperformance.

The worst decision is not picking the wrong fund. The worst decision is sitting in a conservative or balanced fund when your time horizon is twenty or thirty years. The category choice — growth versus conservative — matters more than the provider choice by an enormous margin. Get the category right first.