Low-Fee KiwiSaver Providers in NZ: Do Cheaper Funds Win? (2026)

Simplicity (0.24%), Kernel (0.25%) and InvestNow are NZ's cheapest KiwiSaver funds. But after a decade of returns, do low fees actually win? A comparison of fees against after-fee performance.

New Zealand's cheapest KiwiSaver funds — Simplicity at 0.24% a year, Kernel at 0.25% — charge roughly a quarter of what the average growth fund does. With more than $780 million paid in fees in a single year, it is worth asking whether picking the cheapest fund is the right call.

The short answer is usually, but not always. This guide compares the lowest-fee providers against their after-fee returns, shows when a higher-fee active fund earns its keep, and gives you a checklist to find out whether you are overpaying.

TL;DR: Low-fee passive funds like Simplicity (0.24%) and Kernel (0.25%) sit about 4x below the 1.07% average growth-fund fee, and for most members lower fees win over 30 years. But fee isn't everything — a few higher-fee active funds (Milford) have led on after-fee 10-year returns. Compare net return, not just headline fee.

What do KiwiSaver fees actually cost over 30 years?

A fee of 1% sounds trivial. It is not. KiwiSaver fees are charged as a percentage of your whole balance every year, so they compound against you for the entire life of the fund — usually 30 to 40 years.

Across the industry, members paid $789.6 million in fees in the year to 31 March 2024, at an all-fund blended average of roughly 0.8% a year ¹². (That 0.8% is the average across every fund type, including cheaper conservative funds; the growth-specific average is higher, at 1.07% ⁷.) The lowest-fee leaders sit far below both: Simplicity at 0.24% ⁵ and Kernel's core funds at 0.25% ⁶, versus that 1.07% average for growth funds ⁷ and 0.85% for aggressive funds ⁸ — making the cheapest passive options a genuine low fee KiwiSaver choice at roughly a quarter of the growth-fund average.

Here is what that gap does to a balance over time. Assume a $60,000 starting balance, $4,000 of net contributions a year, and a 6% gross return before fees.

The exact figure depends on your contributions and returns, but the direction does not change: on identical underlying performance, the cheaper fund wins, and the gap widens every year. That is the core case for low-fee investing.

The catch is the phrase "identical underlying performance." Funds do not perform identically, which is where the debate begins.

Who are the lowest-fee KiwiSaver providers?

Three names come up again and again as New Zealand's lowest-fee mainstream KiwiSaver options. All three are predominantly passive (index-tracking) managers, which is the structural reason they can charge so little.

Simplicity

Simplicity charges a single 0.24% p.a. total annual fund charge across every fund — Conservative, Balanced, Growth and High Growth — with no membership or admin fee ⁵. It cut the fee from 0.25% to 0.24% effective 1 September 2025. Its Growth Fund returned 10.06% after fund charges in the year to 31 March 2026, against a fee that is now the lowest of any mainstream growth fund in the country ⁷.

Kernel

Kernel charges 0.25% p.a. on its core index funds — including High Growth, S&P 500 Unhedged and Global 100 — and 0.45% on specialty funds, with no member or account fee and no transaction or FX fees ⁶. Its High Growth Fund (98.37% growth assets) returned 15.79% over the 12 months to 31 March 2026, against a 12.76% category average — and it did that at 0.25% versus the 0.85% average aggressive-fund fee ⁸.

InvestNow

InvestNow's KiwiSaver scheme is consistently grouped with Simplicity and Kernel as one of the lowest-fee mainstream choices, built around its low-cost Foundation Series passive funds with no membership or admin fee on KiwiSaver. The Foundation Series Growth Fund carries a total annual fund charge of 0.38%, and the single-market Foundation Series US 500 Fund just 0.03%, as at 31 March 2026 ¹³. The headline figure varies by fund, so confirm the current charge on the fund you actually choose before you commit.

Passive vs active: does paying more for management pay off?

This is the heart of the question. There are two ways to run a fund:

• Passive (index) funds simply hold the market — the S&P 500, a global index — and charge very little because there is little to manage. Simplicity, Kernel and InvestNow are largely passive.
• Active funds employ managers who try to beat the market by picking and timing investments. They charge more for that effort. Fisher Funds, Milford and Booster are active examples.

The case for passive is the maths above: lower fees, and most active managers fail to consistently beat their index after costs. The case for active is that a good manager can add enough return — or cushion enough downside — to more than cover the higher fee.

The fee is only half the equation. What lands in your account is the after-fee return. A 1.13% fund that nets 9% beats a 0.25% fund that nets 8%. So the real test is not "which fund is cheapest?" but "which fund delivers the best return for the risk, after fees?"

Fees vs returns: comparing after-fee performance by band

Here are fees and long-run net returns side by side. All returns below are stated after fund charges, as at 31 March 2026. We show both the latest 12 months and, where available, the full 10-year annual average, so short-run and long-run results sit in their own columns rather than being compared like-for-like.

Two things jump out. First, over the latest 12 months the cheap passive funds (Kernel, Simplicity) beat their category averages handsomely — a clean win for low fees. Second, over a full 10 years, Milford's actively managed Active Growth Fund returned 8.9% p.a. after a 1.05% base fee plus a performance fee ¹⁰ — matching the aggressive-category average ¹¹ despite charging several times the fee of a Kernel or Simplicity. That is the rare exception that earns its keep, not the norm.

(Kernel and Simplicity carry no 10-year column because both funds are younger than 10 years; their long-run track records are still being built.)

Worked example: when 0.25% beats 1.07% — and when it doesn't

Scenario A — fees decide it. Two members each hold $200,000 in a growth fund and both funds earn 7% gross. One pays 0.25%, the other pays 1.07%. The cheaper fund nets 6.75%; the dearer fund nets 5.93%. On identical performance, the 0.82% fee gap is pure lost return, compounding for decades. The cheap fund wins, period.

Scenario B — returns decide it. Now compare the actual after-fee track records over the 10 years to 31 March 2026. Milford's active fund delivered 8.9% p.a. after all fees, while the average growth fund delivered 7.9% p.a. after fees ¹⁰¹¹. Here the higher-fee fund came out ahead — not because the fee was lower, but because the manager's extra return more than outran the extra fee. (These are net-of-fee figures, so there is no further fee to subtract.)

The lesson: a low fee is a guaranteed head start, not a guaranteed finish. It only loses when a manager genuinely and consistently outperforms — and most don't.

When a higher-fee active fund can be worth it

There are real situations where paying more is defensible:

• A proven long-run track record. Milford's Active Growth Fund has delivered 8.9% p.a. over 10 years after all fees ¹⁰, and is one of the largest single KiwiSaver funds in the country. Booster's Socially Responsible High Growth Fund has topped Morningstar's 10-year Aggressive performance charts. Both charge active-level fees and have, so far, earned them.
• Downside management matters to you. A good active manager can dial down risk before a downturn. If sleeping at night through a market crash keeps you invested instead of panic-switching to cash, that behavioural value can be worth a higher fee.
• You want a specific mandate. Ethical/SRI screening or a tilt you can't get cheaply in an index fund may justify a higher charge.

What is not defensible is paying a premium fee for closet-index performance, or sitting in a high-fee fund out of inertia. And the top of the fee range gets extreme: Booster's Geared Growth fund charges 1.77% plus a $36 annual membership fee — you need exceptional, sustained outperformance to justify that.

How to find your fund's total annual fund charge

You can check your own fee in about three minutes:

1. Open your latest annual KiwiSaver statement (or log in to your provider). Look for "total annual fund charges" or "fees" — expressed as a percentage.

2. Cross-check it free on Sorted's Smart Investor. Search smartinvestor.sorted.org.nz for your exact fund. It shows your fee against the category average so you can see instantly if you're above or below.

3. Compare against the benchmarks: ~0.25% is rock-bottom (passive leaders), ~0.85–1.07% is the active-fund average, and anything above ~1.5% needs a very good reason.

4. Use our free KiwiSaver health check to see your fee and your fund profile in one place, or compare providers side by side with our KiwiSaver fund comparison.

Many members assume they "don't pay any KiwiSaver fees" because nothing leaves their bank account. The fee is deducted from the fund before the return is reported, so it does not show up as a transaction. You are still paying it; it just is not visible on a statement that only shows your balance going up.

Key risks: chasing low fees and ending up too conservative

A common mistake is not paying too much — it's the opposite trap. People become so focused on shaving fees that they overlook the far larger driver of their balance: whether they're in the right fund.

• Too-conservative is more expensive than fees. A 30-year-old sitting in a 0.24% conservative fund will almost certainly end up with far less than a peer in a 1.07% growth fund, because the fund type gap dwarfs the fee gap. The cheapest fund in the wrong risk band is a false economy.
• A low fee on a poor index choice still underperforms. Cheap is only good if the underlying assets suit your timeframe and goals.
• Cutting the government contribution to chase fees. Make sure any provider switch doesn't interrupt your contributions — you need to put in at least $1,042.86 of your own money each KiwiSaver year (1 July–30 June) to get the full government contribution, now 25c per $1 up to a maximum of $260.72 ¹². (Members earning over $180,000 no longer receive any government contribution from 1 July 2025 ³.)
• Forgetting your contribution rate just changed. The default minimum rose from 3% to 3.5% on 1 April 2026, and is set to reach 4% in 2028 ⁴. More money going in changes how much the fee gap actually costs you.

If you're not sure your fund matches your age and goals, a free KiwiSaver review sorts both fee and fund in one sitting.

Your fee-check checklist

1. Find your total annual fund charge on your statement or Sorted's Smart Investor.

2. Confirm your fund type (conservative / balanced / growth / high growth) actually matches your timeframe — this matters more than the fee.

3. Compare your fee to the band average: ~1.07% growth, ~0.85% aggressive. Below ~0.5%? You're in low-fee territory.

4. If you're paying an active fee, check the after-fee 10-year return vs the category average (7.9% growth / 8.9% aggressive) ¹¹. Is the manager actually earning it?

5. Don't sacrifice the government contribution — keep your own contributions above $1,042.86 a year ².

6. Re-check after a switch to confirm no membership/admin fee crept in.

Frequently asked questions

What is the cheapest KiwiSaver fund in NZ? Simplicity charges the lowest headline fee of the mainstream providers at 0.24% p.a. across all its funds, with no membership fee ⁵. Kernel's core index funds are next at 0.25% ⁶. Both sit roughly 4x below the 1.07% average growth-fund fee ⁷.

Do low-fee KiwiSaver funds always perform better? No. On identical underlying performance the cheaper fund always wins, because fees compound against your whole balance. But funds don't perform identically — over the 10 years to 31 March 2026, Milford's higher-fee Active Growth Fund returned 8.9% p.a. after fees ¹⁰, matching or beating many cheaper funds. Compare the after-fee return, not just the fee.

Is passive or active KiwiSaver better? For most members, low-cost passive funds (Simplicity, Kernel, InvestNow) are the sensible default — most active managers fail to beat their index after costs. Active management is defensible when a manager has a genuine long-run track record (Milford, Booster SRI) or when downside management or an ethical mandate matters to you ¹⁰¹¹.

How much do KiwiSaver fees cost me over time? A great deal. New Zealanders paid $789.6 million in KiwiSaver fees in the year to 31 March 2024 at a ~0.8% all-fund average ¹². On a typical balance, the gap between a 0.25% fund and a 1.07% fund can cost more than $100,000 over 30 years because the fee is charged on your entire balance every year.

How do I check what fee I'm paying? Look for "total annual fund charges" on your latest KiwiSaver statement, or search your exact fund free on Sorted's Smart Investor, which shows your fee against the category average. You can also use our free KiwiSaver health check.

Will switching to a lower-fee fund affect my government contribution? Not if you keep contributing. You need at least $1,042.86 of your own contributions each KiwiSaver year (1 July–30 June) to receive the full $260.72 government contribution, now paid at 25c per $1 ¹². Just make sure a switch doesn't pause your contributions.

General information, not personalised financial advice. Seek advice tailored to your situation before acting. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 16 June 2026.