Active vs Passive Investing: Analysis of KiwiSaver Multi-sector Fund Performance

Aim: To examine the relative performance of KiwiSaver index funds and actively managed funds in the main multi-sector fund categories.

Outcome: Completion of this module will enable financial advisers to:

  • Understand the relative merits of clients investing in KiwiSaver funds invested using active and passive strategies.
  • Use that knowledge to better advise clients on the most suitable fund for investment, and to explain the relative performance of KiwiSaver funds.

 

Abstract: The debate around the superiority of active or passive management is enduring and evolving and advisers need to understand the relative merits of each approach. The performance of multi-sector KiwiSaver funds over the last seven years is examined with the conclusion that while fees are vitally important they are not everything and other factors, such as tracking errors, should also be considered.