All 146 KiwiSaver products offered by 16 providers generated a positive return for their investors in 2017, a year that delivered strong gains on equity markets with the local benchmark S&P/NZX 50 Index jumping 22 per cent.
Morningstar's quarterly KiwiSaver survey shows the smallest annual return in 2017 was 1.6 per cent after fees from the AMP Cash Fund, with $82.5 million of funds under management as at December 31, and delivering an annual return of 3.3 per cent over the past 10 years.
The highest return in 2017 was 24.2 per cent after fees from OneAnswer International Share Fund, with $45.9m under management. That fund has delivered annual returns of 7.5 per cent for the past decade.
Other funds to post returns greater than 20 per cent in 2017 were the Generate Focused Growth Fund with $299m under management at 23.9 per cent, the Mercer Shares Fund with $16.8m under management at 21 per cent, the NZ Defence Force Shares Fund with $5.2m under management at 20.8 per cent, the OneAnswer Sustainable Fund with $7.2m under management at 20.6 per cent and the OneAnswer Australasian Share Fund with $28.3m with a 20.4 per cent return after fees. Four of the five Westpac Capital Protect Plans posted annual returns of about 21 per cent.
"It was a great finish to 2017 for KiwiSaver funds, with all options producing positive results," Morningstar manager research ratings director Chris Douglas said in his report.
"The strong performance of equity markets during the fourth quarter of 2017 resulted in KiwiSaver funds with a bias to growth assets outperforming their more defensive-minded counterparts."
Morningstar included 10-year annualised returns last year, which it rates as a better barometer for rating KiwiSaver funds due to their mandate to encourage long-term savings habits for people to improve their living standards in retirement.
Milford Asset Management's Milford Active Growth KiwiSaver fund, with $846.1m under management, topped the list with annualised returns after fees of 12.8 per cent.
"This approach started off with a much greater bias to Australasian equities, but it has become more diversified as it has grown," Morningstar's Douglas said.
"Asset allocation does move around, and the strong performance has come from a bias to growth assets and exposure to Australasian credit."
Fisher Funds-managed Fisher Growth, with $1.5 billion under management, was the second-best at 7.9 per cent annualised returns.
Douglas said multi-sector growth and aggressive funds have outperformed their more conservative peers in seven of the past 10 calendar years, underpinning the notion that those funds will deliver a better return for members over the long-run.
"Ideally, if you have a very long time until retirement, you should be looking at a growth-orientated KiwiSaver scheme (those in our multisector growth and aggressive categories)," Douglas said.
"The performance may exhibit more ups and downs, but over the long term these funds should provide you with a better return."
The best performing conservative fund over a 10-year period is Aon Russell Lifepoints Conservative with $75.2m under management, generating annualised returns of 7.2 per cent, while the top moderate fund was Aon Russell Lifepoints Moderate with $20.8m under management and generating after fees returns of 7.4 per cent.
The best balanced fund was the AON ANZ Balanced with $29.6m under management, delivering annual returns of 7.7 per cent, while the top aggressive fund was Kiwi Wealth Growth, with $1.24b under management, with returns of 6.6 per cent.
Funds under management for all KiwiSaver funds rose to $45.6b as at December 31 from $35.7b a year earlier, with ANZ Bank New Zealand and OneAnswer the biggest provider with $11.63b, up from $9.45b at the end of 2016.
ASB Bank was the second largest with funds under management growing to $8.36b from $6.74b. Non-for-profit fund manager Simplicity has attracted $259.8m of funds under management, up from $68.6m a year earlier.