NZ KiwiSaver breaks through $100b FUM mark

New Zealand’s KiwiSaver superannuation scheme last week passed a significant milestone moving beyond $100 billion in funds under management (FUM).

The scheme ended the financial year with $111.8 billion in FUM, representing a 19.3% increase over the 12 month period.

The fund attributed the growth to a combination of strong investment returns of $13.1 billion and member inflows of $11.2 billion.

The NZ Financial Markets Authority director, Markets, John Horner described breaking through the $100 billion mark as a coming of age for KiwiSaver given New Zealand’s relatively small population.

“For many New Zealanders, KiwiSaver may be their first or only investment and a large part of their retirement savings and ultimate financial security. KiwiSaver is designed with the purpose of improving individuals’ well-being and financial independence, particularly in retirement, and it was pleasing to see individual contributions through salaries and wages were up to an all-time peak of $5.9 billion this year.

Total fees, charged by KiwiSaver providers have increased, 18.9% – from $664.1 million in 2023 to $789.6 million in 2024. This is in line with the increase in total funds under management and shows that fees have not increased per dollar invested, but they have not decreased either.

“While we have seen a gradual decrease in fees as a percentage of funds under management over the last 10 years, this wasn’t continued in the 2024 data. As KiwiSaver grows, I expect to see the benefits that come with economies of scale shared with KiwiSaver members.”

Over the last four years the overall investment profile of KiwiSaver has skewed toward growth, driven by more investors making active choices that are in line with their long-term retirement goals.

There are now 3.3 million people invested in KiwiSaver, representing approximately 62% of the total population. Of those, almost three million have selected their own provider and fund. The rest are default allocated scheme members, who have been automatically enrolled into one of the six default funds.

“Growth funds now represent 46% of total funds under management, with $51.4 billion invested, and a total of 1.53 million investors selecting a growth fund,” says Mr. Horner. “This has grown rapidly over recent years, more than doubling from $24.5 billion in 2021.

“Contrasting this year’s report to previous years, we can see how investor behaviour has changed over time, together with the profile of the funds being selected. The FMA has said for some time that younger investors, saving for retirement, should consider funds with more growth assets, as these are more suited to a longer investment horizon. With KiwiSaver in its 17^th year, investors have become more comfortable with the long-term nature of KiwiSaver. We believe this is why almost half of all KiwiSavers have moved towards more growth-oriented funds.”