KiwiSaver launched in July 2007 — almost exactly at the start of the Global Financial Crisis. The scheme’s 18-year history includes crashes, rapid recoveries, a pandemic, and a rate-rise cycle. Here’s what the long-run return data shows and what it means for members today.
KiwiSaver Through the Major Market Events
2007–2009: Launch into the GFC
KiwiSaver launched in July 2007. Within 18 months, global share markets entered the worst downturn since the 1930s. Growth fund members who enrolled in 2007–08 saw their balances fall significantly in the early years.
However, members who contributed through the GFC were buying units at historically cheap prices. Those who stayed invested — and kept contributing — benefited enormously from the recovery.
Key lesson: Starting at the worst possible time still produced excellent long-run outcomes for members who stayed the course.
2009–2019: Bull market decade
Following the GFC recovery, global share markets entered one of the longest bull runs in history, driven largely by US tech stocks and ultra-low interest rates. Growth fund members benefited substantially. Annualised growth fund returns over this period averaged approximately 9–12% per year for diversified global portfolios.
2020: COVID-19 crash and recovery
In February–March 2020, global markets fell 25–35% in one of the fastest crashes on record. Most NZ KiwiSaver growth funds fell 20–25%.
The recovery was equally fast — by late 2020, most growth funds had recovered to pre-COVID levels, and 2020 ended as a positive year for growth funds overall. Members who switched to conservative at the bottom of the March crash locked in losses and missed the recovery.
2021: Record highs
2021 was an exceptional year for global equities. Many NZ growth KiwiSaver funds returned 15–20% or more. This followed a period of extreme monetary stimulus and technology sector growth.
2022: Rate-rise selloff
Rising interest rates globally (to combat inflation) caused both share markets and bond markets to fall simultaneously — an unusual combination that hit balanced and conservative funds harder than expected. Growth funds fell 10–20%; balanced funds fell 5–15%.
This was a reminder that bonds are not always a safe haven — when rates rise sharply, bond prices fall.
2023–2025: Recovery
Markets recovered through 2023–2025, with growth funds recovering their 2022 losses and generating new highs. By end-2025, most growth fund members were significantly ahead of their pre-2022 positions.
Long-Run Annualised Returns by Fund Type
Approximate average annualised returns since KiwiSaver inception (2007–2025), after fees, before tax:
| Fund type | Approx. long-run annualised return |
|---|---|
| Growth / aggressive | 7–9% p.a. |
| Balanced | 5–7% p.a. |
| Conservative | 3–5% p.a. |
| Cash / income | 2–3% p.a. |
Varies by provider and specific fund composition. Source: FMA annual reports, provider disclosures. Past returns do not guarantee future performance.
The $1,000 Illustration
A member who invested $1,000 in July 2007 and made no further contributions:
| Fund type | Approx. value by end 2025 |
|---|---|
| Growth (7% p.a. avg) | ~$3,380 |
| Balanced (5.5% p.a. avg) | ~$2,650 |
| Conservative (3.5% p.a. avg) | ~$1,860 |
Illustrative only. Individual fund performance varies. Does not include additional contributions, MTC, or employer contributions.
The growth fund roughly 3.4× the original value over 18 years, vs 1.86× for conservative — despite starting at the worst possible moment (just before the GFC).
Key Return Drivers Over the KiwiSaver Era
What drove strong growth fund returns (2007–2025):
- US technology sector dominance (Apple, Microsoft, Amazon, Nvidia, Google)
- Prolonged ultra-low interest rate environment (2009–2022)
- Global economic expansion post-GFC
- Strong NZD returns from offshore holdings (currency effects varied by year)
What created headwinds:
- GFC (2008–09): −25–35% for growth
- European debt crisis (2011): moderate falls
- COVID crash (March 2020): −20–25%
- 2022 rate-rise cycle: −10–20% growth, −5–15% balanced
What the History Tells Us
1. Time in the market beats timing the market Members who stayed invested through every crisis — GFC, COVID, 2022 — ended up substantially ahead of those who switched to conservative at the bottom.
2. Growth funds have outperformed in every long-run period Over any 10+ year period in the KiwiSaver era, growth funds have significantly outperformed balanced and conservative. The volatility along the way is real but ultimately irrelevant for long-horizon investors.
3. Fees compound just like returns A fund returning 8% with 0.3% fees delivers 7.7% net. A fund returning 8% with 1.0% fees delivers 7.0% net. Over 18 years, that 0.7% difference compounds to a meaningful gap.
4. The MTC adds guaranteed return in every year The MTC has been paid in every KiwiSaver year since 2008 (at various rates). Even in 2008–09 when growth fund returns were negative, members still received the MTC — adding positive return on their contributions.
Where to Find Current Returns Data
- Sorted KiwiSaver fund finder (sorted.org.nz) — standardised after-fee returns across all providers
- FMA annual KiwiSaver report (fma.govt.nz) — industry-wide data
- Morningstar — fund research and ratings
- Your provider’s website — current fund factsheets
When comparing returns, always use after-fee, same fund type, same time period comparisons.