KiwiSaver Fund Performance and Asset Allocation Policy

46 Pages Posted: 2 Apr 2019 Last revised: 24 Nov 2019

Date Written: September 29, 2018


This study examines the performance and asset allocation policy of 70 KiwiSaver funds labelled as Growth, Balanced or Conservative over the period October 2007- June 2016. On average, funds underperform their respective benchmarks, with the mean quarterly excess return (after management fees) of -0.15% (Growth), -0.63% (Balanced) and -0.83% (Conservative). Benchmark returns variability, on average, explains 43%-78% of fund’s across-time returns variability, and this is primarily driven by fund’s exposures to global capital markets. Differences in benchmark policies, on average, account for 18.8%-39.3% of among-fund returns variation while differences in fees and security selection may explain the rest. About 61% of Balanced and 47% of Growth funds’ managers make selection bets against their benchmarks. There is no consistent evidence that more actively managed funds deliver higher after-fee risk-adjusted performance. Superior performance is often due to randomness and does not attract additional managed funds, except for the top quintile of Growth funds.

Keywords: KiwiSaver, Fund Performance, Benchmark Asset Allocation Policy, Active Management, Performance Persistence

JEL Classification: G11, G23

Suggested Citation

Dang, Huong D., KiwiSaver Fund Performance and Asset Allocation Policy (September 29, 2018). Pacific Accounting Review 31 (2): 232-257,, Available at SSRN:

Huong D. Dang (Contact Author)

University of Canterbury ( email )

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Christchurch, 8140
New Zealand
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