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Kernel KiwiSaver Plan vs Superlife KiwiSaver Scheme

​​Our comprehensive comparison between The Kernel KiwiSaver Plan and Superlife, two leading KiwiSaver platforms, explores the key differences in fund options, fees, tax considerations, accessibility, and more to help you determine which platform best suits your investment needs.
Updated 1 October 2024

Summary
  • Many New Zealanders continue to favour index fund investing, given the low fees and, in many cases, above-average diversified fund performance. Certain funds, when structured efficiently, also offer tax benefits.
  • KiwiSaver schemes increasingly offer index funds; two popular options include Kernel and Superlife.
  • Managed by Smartshares, Superlife was launched in 2007 and provides KiwiSaver index-based investment and superannuation funds alongside insurance solutions.
  • Comparatively, the Kernel KiwiSaver Plan launched in 2022 and is independently New Zealand-owned and a development of the core Kernel investment funds offering (as our review outlines).
  • In this comparison, we examine Superlife and the Kernel KiwiSaver Plan. Overall, each platform is known for its range of low-cost, index-tracking funds, which are increasingly appealing to KiwiSaver members looking for an alternative to high-fee, actively managed funds.
  • While both platforms offer index funds, some structural differences can impact your investment outcome.
  • To explain the differences and help you make the right choice for your investing needs, we break down the key differences.

Our guide covers:
Disclaimer: MoneyHub Founder Christopher Walsh invests with Kernel and Kernel is a long-standing client of MoneyHub. As is the case throughout the website, our research and analysis are conducted independently to ensure unbiased and objective information based on numbers.

This guide is intended to comprehensively compare The Kernel KiwiSaver Plan and Superlife, helping investors make informed decisions based on their individual investment needs and preferences.​

Superlife vs Kernel: Our Focus on KiwiSaver
  • Superlife provides financial products beyond KiwiSaver, including life insurance, medical, and disability cover (as outlined in Superlife's insurance offerings).
  • While these additional services might appeal to anyone looking for comprehensive financial protection, our comparison focuses solely on the KiwiSaver schemes (and similar funds) offered by both Superlife and Kernel.
  • As of September 2024, as reported by Morningstar, Superlife manages approximately $2.3 billion in KiwiSaver funds, having launched its first funds in 2007. Kernel, launching its KiwiSaver in mid-2022, has quickly grown to manage around $250 million in KiwiSaver funds.
  • We aim to provide a clear, in-depth comparison of the KiwiSaver offerings from both Superlife and Kernel, focusing on fees and features.
  • For a more in-depth analysis of all the available funds, we encourage you to read our dedicated Kernel and Superlife KiwiSaver reviews, which cover their full offerings.

Key Differences Between Index Funds and ETFs

​​Kernel and Superlife invest in index funds, whereas many New Zealanders may be more familiar with ETFs. While Exchange Traded Funds (ETFs) and Index Funds are often used interchangeably by many investors, they differ. We explain the differences to help clarify.

What is an Index Fund?
  • ​An index fund is a type of investment designed to invest in the components of a market index, such as the New Zealand S&P/NZX 50 (the largest 50 companies) or the Standard & Poor's 500 Index (S&P 500). An index fund provides diversity and can lower risk as your investment is spread over many companies within the index.
  • Index funds also benefit from low operating expenses, which means their management fees are usually lower than those for actively managed funds. This is because the funds invest systematically in companies within the index, eliminating the need for active management. Superlife and Kernel are committed to lower fund fees than actively managed funds like those offered by Milford, Booster and Fisher Funds.
  • An index fund operates regardless of market conditions, so your investment is worth more as markets increase and vice versa.

How Do Index Funds Relate to Exchange Traded Funds (ETFs)?
  • ​In most cases, exchange-traded funds (ETFs) are index funds; however, the term ETF doesn't tell you if the fund is index-tracking or actively managed. Instead, it simply tells you that the units in the fund are traded on a stock exchange like individual shares, allowing for real-time buying and selling throughout the day using a broker.
  • The price of an ETF fluctuates as the index it represents moves, whereas the price of an index fund typically updates once a day.
  • Buying and selling an ETF will almost always incur trading costs or brokerage, unlike index funds, which can be bought without transaction fees. A key difference is that units in an ETF can be traded throughout the day, while units in an unlisted index fund are often traded just once daily.
  • This distinction is important as Superlife mainly invests in a selection of Smartshares ETFs, along with some use of offshore ETFs. At the same time, the Kernel KiwiSaver Plan invests into the Kernel index funds, which focuses on directly replicating low-cost index funds, except for some funds.​

The Kernel KiwiSaver Plan vs Superlife - Funds and Fees Compared

Superlife:
  • Offers KiwiSaver, investments, insurance, and pension transfers. As outlined in our Superlife review, their fund range includes 40+ funds covering New Zealand, Australia, and US-focused markets.
  • Smartshares, the parent company of Superlife, was launched in 1996 and is owned by NZX (New Zealand Stock Exchange). It has 80,000 KiwiSaver investors, and the Superlife KiwiSaver scheme has a total of over $2.3 billion assets under management (AUM) per recent Morningstar reporting.
  • There is no minimum investment amount for both investments and KiwiSaver - you can start with as little as $1.
  • Superlife offers a range of funds suitable for all risk profiles. However, it is more weighted towards growth assets/funds and, therefore, suitable for long-term, passive investors who buy and hold.
  • Investors can select Superlife and use their platform directly, a financial adviser (in some cases), and, for a limited number of funds, Sharesies KiwiSaver.
  • Superlife offers the option of mixing funds, arguably rare in the KiwiSaver space, given that most schemes require you to select one fund.

The Kernel KiwiSaver Plan:
  • Offers 17 local and international index funds plus three actively managed fixed-income funds, as outlined in our Kernel KiwiSaver Plan review.
  • Kernel launched in 2019 and has grown quickly, with over $1.2 billion invested (investment funds and KiwiSaver) and thousands of investors. We believe it has become popular for its low management fees and user-friendly platform.
  • In mid-2022, Kernel expanded its product range to include KiwiSaver (see our Kernel KiwiSaver Plan review) and savings products, catering to all risk profiles.
  • You can mix Kernel funds to create a tailored KiwiSaver portfolio.
  • There is no minimum investment amount for both investments and KiwiSaver - you can start with as little as $1.

Our view: Both Superlife and the Kernel KiwiSaver Plan provide a range of options suitable for different investor needs. Superlife has a broader selection of funds covering various markets, which might appeal to those seeking specific regional or sector exposure. Kernel has lower fees and is arguably more tax-efficient, details of which we outline below.

Comparing Six Key Funds: Kernel vs Superlife

Superlife has three funds that hold around 30% of the total scheme's investor money, with the largest fund being the High Growth Fund (around $640m as of June 2024). Kernel, by launching its KiwiSaver, has launched funds that our research team believes will appeal to existing Superlife investors who may consider switching their KiwiSaver based on more favourable fund offerings.

If you're considering such a move, it's crucial to make an apples-to-apples comparison—both Superlife and Kernel offer diversified funds that cater to various risk appetites and investment goals. You can see the latest KiwiSaver performance reports, which outline all the funds below. 

Our comparison focuses on the following six key funds:
1) Kernel Cash Plus Fund vs Superlife NZ Cash Fund
The Kernel Cash Plus Fund aims to provide a low-risk investment option focusing on capital preservation and modest returns, making it suitable for investors who prefer stability over high growth.
  • Fees: 0.25%, no KiwiSaver membership or administration fees
  • Performance: Per Morningstar reporting, the 1-year total return to 30 June 2024 was 6.60%

The Superlife NZ Cash Fund is designed to generate a return in line with cash securities.
  • Performance: Per Morningstar reporting, the 1-year total return to 30 June 2024 was 5.00%
  • Fees: 0.52% p.a. and a $30 a year administration fee.

Our View: From one year to 30 June 2024, the Kernel Cash Plus Fund returned 6.6%, 1.6% higher than the Superlife NZ Cash Fund's 5% return. This represents a 32% outperformance, highlighting Kernel's stronger performance during this period. However, remember that past performance does not guarantee future results.

2. Kernel Balanced Fund vs Superlife Balanced Fund
Both providers offer Balanced funds, each targeting 60% to growth assets (shares) and 40% to income assets (cash and bonds). The funds are highly diversified across various assets, including international and domestic bonds, cash, and global and domestic shares. The largest difference in these funds' composition is in the investments' geographic mix. As of 31 August 2024, Kernel's balanced fund had 45% in US assets vs SuperLife's 31%. Kernel's NZ assets were 42% vs 33% for SuperLife. 

The Kernel Balanced Fund seeks to offer a balanced mix of growth and income assets, providing a moderate risk-reward profile suitable for investors seeking stability and growth potential.
  • Fees: 0.25%, no KiwiSaver membership or administration fees
  • Performance: Per Morningstar reporting, the 1-year total return to 30 June 2024 was 11.80%

The Superlife Balanced Fund follows a similar strategy, aiming to balance capital growth and income generation.
  • Fees: 0.60% p.a. and a $30 a year administration fee.
  • Performance: Per Morningstar reporting, the 1-year total return to 30 June 2024 was 9.20%

Our View: The Kernel Balanced Fund delivered an 11.80% return over the one year to 30 June 2024, 2.60% higher than the Superlife Balanced Fund's 9.20% return. This represents an outperformance of approximately 28%. While this highlights Kernel's stronger performance in this period, it's essential to remember that past returns do not indicate future results.

3. Kernel High Growth Fund vs Superlife High Growth Fund
Both providers offer High Growth funds, each targeting 98% to growth assets (shares) and 2% to cash. The funds are highly diversified across a broad range of international and domestic shares. Both funds have a separate allocation, up to 5% each, in Global Property and Global Infrastructure assets. The largest difference in these funds' composition is in the investments' geographic mix. As of 31 August 2024, Kernel's High Growth fund had 49% in US assets vs SuperLife's 35%. Kernel's NZ assets were 31% vs 28% for SuperLife. The SuperLife High Growth fund has 18% in Australian shares vs only 1% for Kernel, which tends to reflect the global benchmark index.

The Kernel High Growth Fund is designed for investors seeking maximum growth potential by investing predominantly in equities. This fund suits those with a higher risk tolerance and a long-term investment horizon.
  • Fees: 0.25%, no KiwiSaver membership or administration fees
  • Performance: Per Morningstar reporting, the 1-year total return to 30 June 2024 was 15.60%

The Superlife High Growth Fund also focuses on achieving high returns through significant exposure to growth assets, including international and domestic equities.
  • Fees: 0.63% p.a. and a $30 a year administration fee.
  • Performance: Per Morningstar reporting, the 1-year total return to 30 June 2024 was 12.80%

Our View: The Kernel High Growth Fund achieved a 15.60% return over the one year to 30 June 2024, 2.80% higher than the Superlife High Growth Fund's 12.80% return. This equates to an outperformance of approximately 22%. While this showcases Kernel's stronger performance over this timeframe, it's important to note that past returns do not predict future outcomes.

Why These Funds Are Comparable

​We've selected funds from Kernel and Superlife that share similar investment objectives and risk profiles to provide a fair and direct comparison. While each fund has its unique approach, they all fall within the same risk category of diversified KiwiSaver options. These are the fund types that most New Zealanders invest in for KiwiSaver.

Our Methodology Explained
  • Performance Data: We have used performance data as reported by Morningstar for the 1-year total return to 30 June 2024. This provides a standardised measure of each fund's performance over the same period, allowing for a clearer comparison.
  • Fees: We have included the annual management fees and additional administration or membership fees for each fund. It is widely accepted that lower fees can significantly impact long-term returns, so they are an essential aspect of this comparison.
  • Investment Strategy: We've outlined each fund's core investment strategies to provide insight into how they aim to achieve their stated objectives, whether it's capital preservation, a balanced mix of assets, or high growth potential.
  • Performance Period:  Short-term performance shouldn't be the deciding factor when selecting an investment. As the Kernel KiwiSaver funds are new, and this report is using the independent performance reporting of Morningstar, we are currently only reporting on 1 year results. In their fund Factsheets, the Kernel funds have 3 and 5-year benchmark returns, which can be used as a guide. 

However, past performance is not an indicator of future results. There is no assumption or guarantee that Kernel's funds will continue to outperform Superlife year after year, even though the fees are lower. Furthermore, the funds have different risk levels, with growth funds typically exhibiting higher volatility. While we have compared similar funds, each provider has its asset allocation and diversification approach, which can affect performance and risk.

Our View:
  1. Kernel and Superlife offer a range of KiwiSaver funds designed to cater to different investor needs and risk profiles. A key differentiator in this comparison is the cost structure, with Kernel offering significantly lower fees across its funds.
  2. In addition to lower fees, Kernel's funds have demonstrated strong performance over the past year, outpacing their Superlife counterparts in the same categories. This outperformance could be attributed to Kernel's investment approach, fund management strategies, and potentially more efficient asset allocation.

KiwiSaver Scheme Fees

​Superlife:
The lowest fund fees include the UK Cash Fund—0.49%, the NZ Cash Fund—0.52% (as shown above), and funds such as the US 500 Fund and NZ Bonds Fund (both 0.54%).
  • In addition to the above fees is Superlife's $ 30-a-year KiwiSaver administration fee.
  • Please note that the administration and fund fees differ for the Superlife Invest scheme - we focus on the retail KiwiSaver scheme.

The Kernel KiwiSaver Plan:
  • Management fees: 0.25-0.30% p.a. for core index funds, 0.45% p.a. for specialty index funds, and 0.25%- 0.40% p.a. for actively managed funds.​
  • No platform fee for any KiwiSaver investment

Our View: The Kernel KiwiSaver Plan stands out with its diverse fund options, no platform fees, and a focus on low-cost, long-term investment strategies. This makes it an attractive option for those looking to maximise their retirement savings without incurring additional fees. Superlife allows for a mix of over 40 Superlife funds. While Superlife offers more funds, the average fees are typically twice those offered through the Kernel KiwiSaver Plan.

The Kernel KiwiSaver Plan vs Superlife - Tax Considerations

​Superlife:
  • Superlife funds are multi-rate PIE funds taxed at an investor's PIR.
  • Most Superlife international funds simply invest in other offshore funds; for example, the Superlife Total World fund buys a Vanguard Total World fund.
  • This layering of investments can create tax leakage, meaning an investor in New Zealand will have lower after-fees and after-tax returns than a New Zealand-based fund that buys all the underlying assets directly.
  • The impact varies by fund based on the yield on the underlying assets, but according to Kernel's research, it could arguably reduce net returns by 0.10% to 0.40%+, depending on the fund and tax structure.

The Kernel KiwiSaver Plan:
  • All of The Kernel KiwiSaver Plan's funds are multi-rate PIE funds, meaning tax is paid at the investor's correct PIR. The investor does not need additional tax work, and the investment options are tax-efficient for children.
  • The Kernel KiwiSaver Plan's funds hold the underlying assets directly, meaning they don't suffer from tax leakage issues.

Our View: The Kernel KiwiSaver Plan offers a more streamlined and tax-efficient approach. All of the plan's funds are multi-rate PIEs, ensuring investors are taxed at their correct PIR and eliminating the need for additional tax filings. Superlife's use of international funds can lead to tax leakage, reducing after-tax returns compared to funds that hold underlying assets directly.

The Kernel KiwiSaver Plan vs Superlife - Accessibility, Customer Support and Additional Features

​​Superlife:
  • Self-service online platform for tracking investments
  • 0800 phone support available for customer inquiries
  • App to monitor investments
  • Wide range of funds offering sector and geographic diversity
  • Limited socially responsible investment (SRI) options
​
The Kernel KiwiSaver Plan:
  • User-friendly online platform for tracking investments
  • 0800 phone support and email for customer service
  • Transparent reporting on fund performance and composition
  • Low-cost, fee-competitive index funds
  • Focuses on investor education and transparency
  • Ethical investment options with low ESG fees
  • No KiwiSaver joining, administration or annual membership fees; every dollar invested goes directly into funds

Frequently Asked Questions

If you have specific questions, we suggest contacting the client services team at Kernel and Superlife. Our information below is general and specific to the differences between the two platforms.

What are the main differences between the Kernel KiwiSaver Plan and Superlife?

The Kernel KiwiSaver Plan offers a streamlined selection of 17 local and international index funds and 3 actively managed fixed-income funds, with daily order processing and a low-cost structure. Superlife provides over 40 funds covering various markets but requires brokerage accounts for transactions and typically processes investments monthly.​

What are the cost differences between the Kernel KiwiSaver Plan and Superlife?

The Kernel KiwiSaver Plan:
  • Management fees: 0.25-0.30% p.a. for core index funds, 0.45% p.a. for specialty index funds, and 0.25%- 0.50% p.a. for actively managed funds.
  • No KiwiSaver platform or annual administration fee.

​Superlife:
  • Management fees range from 0.39% to 1.43% p.a.
  • Superlife KiwiSaver annual member fee of $30
  • No transaction fees for buying or selling units

How do tax considerations differ between The Kernel KiwiSaver Plan and Superlife?

  • ​The Kernel KiwiSaver Plan: All funds are Multi-rate PIEs, meaning tax is paid at the investor's Prescribed Investor Rate (PIR), which is more tax-efficient for individuals with a PIR below 28%. The Kernel KiwiSaver Plan holds underlying assets directly, avoiding tax leakage.
  • ​Superlife: Funds are multi-rate PIEs taxed at the investor's PIR International funds and may suffer from tax leakage.

What investment minimums do the Kernel KiwiSaver Plan and Superlife require?

  • The Kernel KiwiSaver Plan and Superlife allow investments starting from $1, offering the ability to pick and mix funds without constraints.​

Can I invest in socially responsible funds with the Kernel KiwiSaver Plan and Superlife?

  • ​The Kernel KiwiSaver Plan: The Kernel KiwiSaver Plan offers five ethical investment options with low fees.
  • Superlife offers only one socially responsible investment (SRI) option, the Ethica Fund, which is outlined on the Superlife website.

Are there any joining, switch or withdrawal fees for the Kernel KiwiSaver Plan and Superlife?

No – neither Kernel nor Superlife charges such fees. ​
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