Why 10-year returns matter more than 1-year returns

Every January, financial media publishes a list of "the best-performing KiwiSaver funds last year." It's almost useless. Here's why.

One-year returns are mostly luck

Markets are weird. The fund that wins any given year is usually the one that took the most concentrated bet on whatever sector happened to be hot. In 2021 it was tech. In 2022 it was energy. In 2023 it was AI. The winners change every year, and you can't predict which.

10-year returns reflect skill

Over a decade, you get multiple market cycles, multiple "hot sector" rotations, and the fund manager's actual approach has time to play out. The funds that win over 10 years are typically the ones with consistent, disciplined processes. not the ones taking big swings.

The NZ 10-year leaders

As of Q1 2026 (Morningstar KiwiSaver 360, period ending 31 March 2026), the top 10-year annualised returns in NZ KiwiSaver, by Smiths risk band:

• Milford Conservative. 4.7%/yr (Conservative #1)
• Milford Balanced. 7.7%/yr (Balanced/Moderate #1, tied with QuayStreet Balanced)
• Milford Active Growth. 9.8%/yr (Growth #1)
• Booster Socially Responsible High Growth. 9.8%/yr (Aggressive #1)
• Generate Focused Growth. 9.5%/yr (Aggressive #2)

None of these were #1 every single year. They all had down years. But over a decade they consistently outperformed. See the full ranking.

What to actually look at

When evaluating a fund, look at:

• 10-year annualised return (or 5-year if 10 isn't available)
• Total annual fees. the cost of those returns
• Risk band. make sure you're comparing like-with-like (don't compare an Aggressive fund's 10% to a Conservative fund's 5%. they're different products)

Use our screener to filter and sort on exactly these.

Source: Morningstar KiwiSaver 360, annualised returns net of fees. Past performance is not indicative of future returns. General information only. not personal financial advice.