There was a huge disparity in the performance of the top and bottom KiwiSaver funds last year - a year in which sharemarkets plunged in March before bouncing back to hit new highs.
The top KiwiSaver fund rose more than 30 per cent in 2020 but the worst was down over 25 per cent, figures from research and ratings firm Morningstar show.
Nikko Asset Management's KiwiSaver option scheme fell 25.9 per cent over the year - fortunately it only had $700,000 invested in it.
While the Juno growth fund rose a startling 30.4 per cent over the year to December 31.
It had nearly 90 per cent (89.6 per cent) of its funds invested in growth assets (shares and property) - the highest level for all diversified growth funds monitored by Morningstar.
Its performance was well above the average return for growth KiwiSaver funds of 10.7 per cent.
Tim Murphy, director of manager research, Asia-Pacific at Morningstar, said it all came down to what the underlying investments of the funds were.
"In Juno's case they had heavy exposure to US growth companies and that was more or less the best-performing sector in all of last year. Their far higher allocation to that led to outperformance of equivalent funds last year."
"On the flipside of that Nikko options strategy was certainly a - it was a long way off the bottom performance tables to anything else."
"They had an offshore strategy that went horribly wrong looking at the performance profile in the Covid period of February/March last year."
Murphy said a 30 per cent return was unusual. "You wouldn't expect to see that very often."
Many KiwiSaver funds, particularly those in the growth category - which means they have more money invested shares and property - had double-digit returns in 2020.
"It was a strong year for most KiwiSaver investors looking at where the bulk of the money is."
But Murphy warned investors not to expect a repeat of that any time soon.
"You shouldn't expect double-digit returns to happen too often through the cycle."
Investors are advised against chasing KiwiSaver funds based solely on returns as past performance does not guarantee future performance.
Performance data should be looked at over as long a timeframe as possible - preferably at least 10 years.
Murphy said one factor that had stood out in the KiwiSaver numbers for 2020 was that a poor year economically did not mean there would be bad investment returns.
"They are obviously two very different things and people often confuse the two - there has been no better example than 2020 on that front."
"It was one of the worst years on record if you look at economic data points globally but one of the best for investments despite a very sharp drawdown in February and March."
Murphy said KiwiSaver investors who stuck out the market turmoil and stayed in the right fund for them had been rewarded.
"KiwiSaver is a long term investment for most people and ensuring that you are invested in an option that is appropriate for your own circumstance is important and for most people that should be a long term focus.
"If you didn't panic and stayed invested in that appropriate option over the course of last year you were rewarded."
Over the year the top-performing fund for the balanced category was also a Juno fund which was up 20.9 per cent compared to the average for the sector of 8.8 per cent.
While the Simplicity conservative fund was top in the conservative category up 8 per cent over the year compared to the average of 6.1 per cent.
The top fund for the quarter for the conservative sector was the Milford conservative fund with a return of 3.1 per cent. CareSaver balanced topped the balance sector with a return of 8.1 per cent and Juno's growth fund was the best in the growth sector up 11 per cent.
The S&P/NZX 50 rose 11.4 per cent and the ASX200 was up 13.7 per cent over the December quarter.
International shares also rose with the MSCI World index up 13.9 per cent in US dollars but only 4.6 per cent in NZ dollars.
Murphy said short-term interest rates had continued to offer very low returns reflecting the Reserve Bank's decision to keep the official cash rate at 0.25 per cent.
"The 10-year New Zealand Government bond yield climbed to 0.99 per cent from a low of 0.52 per cent at the start of the quarter. The S&P/NZX government bond index
returned -2.8 per cent over the December quarter."
KiwiSaver assets rose to $76.3 billion at the end of December, up from $63.3b a year earlier.
Murphy said given the economic downturn, loss of jobs and uncertainty resulting from the Covid-19 pandemic, most would agree that it had turned out better than expected, with the final quarter of 2020 performing particularly well.
"The strong finish to the year may be attributed to the continued progress in the distribution of vaccines and further monetary and fiscal support from policymakers."
ANZ remains the largest provider with a market share of 23 per cent and $17.5b in funds under management, followed by ASB with a 17.5 per cent share and $13.4b.
Westpac is the third largest with 11.2 per cent share and $8.5b.