Strong three years for KiwiSaver members – new player in top spot

Despite predictions of a market downturn, 2025 proved to be a solid year for investors, particularly those participating in New Zealand’s KiwiSaver scheme. A recent survey from actuarial firm MJW revealed positive returns across most funds, capping a strong three-year performance period.

Strong Returns Across the Board

The median KiwiSaver balanced fund delivered a 1.7% return for the December quarter and a robust 9.8% for the year. Over a three-year period, median returns reached 13.3% for growth funds, 10.9% for balanced funds, and 7.4% for conservative funds. These gains were largely driven by performance in developed market equities.

Did You Know? The MSCI Emerging Index, tracking markets like China, Brazil, and India, returned 30% in 2025, exceeding the Nasdaq’s 20% return.

Global Market Influences

According to MJW principal Ben Trollip, the MSCI World Index experienced a 3.4% rise in local currency terms during the quarter. Japan led the gains with a 12% increase, followed by the UK at 6.2%. Emerging markets, particularly India with a 6.2% rise, also contributed significantly. A weaker New Zealand dollar against most currencies further boosted returns for unhedged investments.

Shifting Leadership in KiwiSaver Funds

Simplicity emerged as the top performer across growth, conservative, and balanced KiwiSaver funds for the December quarter. Looking at annual returns, Westpac led the growth and balanced categories with 12.8% and 11% respectively, while AMP topped the moderate category at 9.5% and ASB led conservative funds with 7.6%. Over three years, Simplicity continued its strong performance in growth funds (15.7% annually), with ASB leading balanced (12.6%), AMP moderate (10.9%), and ASB conservative (8%).

Expert Insight: The survey highlights a potential shift in KiwiSaver fund performance, with Simplicity gaining prominence while traditionally strong performers like Generate and Milford experienced a comparatively weaker quarter. This suggests a changing landscape in investment strategies and market responsiveness.

Long-Term Trends and Potential Shifts

Over a decade, Milford maintained its lead in growth (10.2%) and balanced (8.1%) funds, AMP in moderate (5.8%), and Milford in conservative (5.1%). Trollip noted a recent trend of New Zealand equities underperforming compared to global equities over the past three to five years, despite offering lower volatility. Milford’s active growth fund grew significantly, from $3.3 billion in December 2022 to $8.5 billion.

The report also observed a rebound in global markets following a November sell-off, coupled with fluctuations in New Zealand interest rates tied to economic data. As 2025 closed, concerns grew regarding a potential correction in technology stock valuations, evidenced by peak search traffic around the sector in September.

Frequently Asked Questions

What was the median return for a KiwiSaver balanced fund in 2025?

The median KiwiSaver balanced fund returned 9.8% for the year 2025, after costs and before tax.

Which fund provider topped the growth category for the December quarter?

Simplicity was first in the growth, conservative and balanced funds for the December quarter.

What role did the New Zealand dollar play in investment returns?

The New Zealand dollar weakened compared to most currencies, which resulted in better returns in unhedged terms.

Given the recent performance of various investment strategies, how will these trends influence your long-term financial planning?