Inside Money: Bonanza! How banks cash in on KiwiSaver

The appropriate banks' theme song for Kiwisaver is the Bonanza song suggests David Chaplin.

If banks wanted to adopt a theme song for KiwiSaver it would have to be this one.

Try it at home.

But before it was a TV show, bonanza was a word which meant: "something that produces very good results for someone or something".

And as I have exhaustively detailed over the years KiwiSaver is something that - regardless of its possible wider social benefits - has produced very good results for banks.

Now a new study has added further detail to the KiwiSaver bank back-story.

Produced by actuarial consulting firm, Melville Jessup Weaver (MJW), the analysis is the first to dig into the quarterly reporting data all KiwiSaver providers have had to supply since September 2013.

The MJW report reveals some interesting differences between the respective bank-owned KiwiSaver schemes.

For instance, ANZ and KiwiBank have notably lower proportions of members in their conservative options - 38 per cent and 20 per cent respectively - compared to rival banks. Both ASB and Westpac have about 60 per cent of members in the conservative option while the BNZ scheme (launched in 2013) boasts almost 70 per cent of its membership in that category.

"Perhaps ANZ has been more active in moving members of their default fund into a more appropriate investment strategy," the MJW study says. "The Kiwibank results are an amalgam of their two schemes and so it is not clear what the possible split [between conservative and other investment options will evolve into]."

Over the last five years ANZ and Westpac have performed the most consistently, the report says.

"The results for Kiwi Wealth, previously the Gareth Morgan scheme, have arguably been the most variable," MJW says. "The differences in the results for each scheme are reasonably significant albeit we are considering a relatively short period."

Overall, MJW proclaims ANZ as top dog in KiwiSaver based on size, growth rate, performance and fees... but that last point bears explaining.

"Note that as we have looked at the results from the perspective of a bank we have given a top rating where the bank's fees are highest!" the study says.

Despite its massive, and growing, scale, ANZ is the most expensive bank KiwiSaver scheme in all three risk categories (conservative, balanced and growth) - based on a $10,000 account size.

Here's Johnny Cash to explain.