SuperLife Invest and KiwiSaver Review - Making Sense of 41 Funds

Updated 27 January 2019

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Summary of SuperLife

• SuperLife offers the choice of 40 KiwiSaver funds and one lifecycle investment option called Age Steps. Predominately these invest in a range of index funds offered by a company owned by the NZX. 
• The KiwiSaver funds sit in three categories -  Managed Funds (6), Sector Funds (11) and ETF Funds (23). The 23 ETF funds invest directly in their corresponding Smartshares fund (read our Smartshares review).   
• With the Age Steps as the Lifecycle investment option, changes the risk profile based on your age, so is a set and forget type solution. It reduces the expected volatility as you approach retirement and the need to use the funds.    
• It's free to switch between any SuperLife fund, and you can choose one or 'My Mix' a combination of any of the funds in any proportion and change the mix at any time. Picking can be overwhelming, so it's important to read the Product Disclosure Statements and Fund Updates to understand what you will invest in.
• There are two fees charged - an annual fee ($30) for being a SuperLife member (whether you are actively contributing to KiwiSaver or not), and the management fee for most funds sits between 0.50% to 0.70% of the average size of your investment (the average management fee for the 12 months to 30 June 2018 was 0.60%). For example, if your SuperLife fund's balance averaged $10,000 in 2018 and your fund fee was 0.60%, your total fees would be $90 - $30 (annual fee) + $60 (the management fee of 0.60% X $10,000).
• SuperLife offers a number of funds targeted at different age groups with the aim of maximising growth at younger stages of life and protecting wealth as investors get older.
• SuperLife offers a HUGE range of investment options with varying degrees of risk, including Kiwi companies, global companies, emerging markets, mining, property and bonds and government debt.

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Read this First: Fees, Performance and Understanding What's Best For Your Situation
A lot of media attention focuses on KiwiSaver fees, but this is only one thing to consider when picking the most suitable provider and fund for your retirement needs. Being comfortable with what you're investing in is the most important aspect of saving for your retirement. 

With 41 fund options available, SuperLife offers KiwiSaver members low-fee flexibility with its fund offering. Many of the 41 funds invest in index funds, meaning they are not actively managed by a fund manager. This helps to keep the fees low and gives investors more security about where their money is invested.
 
Our Review 
In this guide, we outline what SuperLife is, what funds they offer to KiwiSaver members and how they're different to other funds, as well as looking at alternatives and the level of fees involved.
 
This review primarily focuses on the KiwiSaver funds, but we also touch on personal investment funds and compare two other options in the market with Simplicity.

Please note: MoneyHub is not a Financial Adviser, and this guide has been published to explain the investment fundamentals and outline the pros and cons of SuperLife as a KiwiSaver investment option.
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This Guide covers:
What is an "index fund"?
The Specs of Superlife
Superlife KiwiSaver Funds
Who is Superlife Suited to?
Claims Made by Superlife
10 Things to know about Superlife

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First Steps - What is an "index fund"?

• An index fund is a type of investment that is established to invest in or track the components of a market index, such as the New Zealand NZX50 index (our largest 50 companies) or the Standard & Poor's 500 Index (S&P 500).
• An index fund provides diversification, as your investment is spread over many companies within the index
• The index fund benefits from low operating expenses and management fees because the fund follows a set of rules set by the index and therefore doesn't need fund managers to make judgments or research to make the investments.
• An index fund is different to many other managed funds, which have investment managers working to predict market movements, pick winners and make investments on your behalf to add value to your portfolio. An index fund is based on a philosophy that to predict the future accurately and regularly over many years is less than statistically possible.

The Specs of SuperLife

• NZX, the New Zealand Stock Exchange owns Smartshares, the manager of four SuperLife schemes and the Smartshares Exchange Traded Funds.
• There are 41 funds open to KiwiSaver members; and in the year to June 30 2018, the annual returns ranged from -1% to +44%, with an average return being 9.73%. These figures do not indicate future returns. 
• The funds fall into four categories:

1. SuperLifeAge Steps (1 fund). This fund is designed to meet the needs of KiwiSaver members during their lifespan; 'managed growth' funds for younger members (i.e. overseas shares) and 'managed income' which are wealth-protection funds for those close to the retirement age (i.e. New Zealand cash deposits). To see the proportion invested in each for every age, click here.  
2. Managed Funds (6 funds). These funds include an ethical investment fund, an income-generating fund and high growth share fund. 
3. Sector Funds (11 funds). These funds invest in specific areas, such as Cash assets in New Zealand, shares in Australia or shares in emerging markets.  
4. ETF Funds (23 funds). Exchange Traded Funds to choose from with their own specific New Zealand and/or international holdings. Together, the 23 ETFs offered invest across New Zealand, Australia and a broad range of global stock exchanges. The 23 ETF funds invest directly in their corresponding Smartshares fund (read our Smartshares review).  

• The diversity in funds is enormous, and understanding what to invest in can take some time.

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SuperLife Funds

SuperLife offers a range of funds that invest in income and growth assets. Past performances do not indicate future results, but generally the characteristics of how each fund behaves remains the same, as we explain below. 

Income assets: Income assets include cash and fixed interest deposits such as bonds and government deposits. Cash assets are low-risk and generate positive returns, but the return will be lower than returns for growth assets (such as shares) in the long-term. With fixed interest assets, the return will (usually) be above cash but still below growth assets in the long run. Investing in income assets is popular with people approaching retirement who want to protect their nest egg in relatively safe investments. Younger KiwiSaver members will be more likely to invest in growth assets.

Growth assets: Growth assets include shares and property funds, which in the long-term can be expected to provide returns higher than income assets. At times, growth asset returns can be negative over the short to medium term and New Zealand and global sharemarkets go up and down.  

Life Cycle Funds - SuperLifeAge Steps

• This fund is designed to grow your fund the most while you're young, and protect it as you near retirement age. This is to maximise the nest egg you'll have at 65 while keeping it safe when you need it.
• The fund automatically sets the proportion of your investment in income and growth assets based on your age. As SuperLife states, "as you get older, the proportion of your investment in more volatile growth assets will be reduced, lowering the expected size of the ups and downs in the value of your investment".
• If you are 35 for example, your investment in managed growth as proportion of total investments will be higher compared to someone who is 50 as SuperLife clearly outlines.  Fee differences are minimal and decrease as you move into older steps.
• The proportion of your investment in growth and income assets is automatically triggered by your age so there is no need to notify SuperLife.

 
The fund has a range of fees and risk indicators depending on your age:

1. Age 20-29 years  - Annual fund fee: 0.62%. Risk indicator = 4
2. Age 30-39 years - Annual fund fee: 0.61%. Risk indicator = 4
3. Age 40-49 years - Annual fund fee: 0.61%. Risk indicator = 4
4. Age 50-59 years - Annual fund fee: 0.60%. Risk indicator = 4
5. Age 60-69 years - Annual fund fee: 0.59%. Risk indicator = 3
6. Age 70-79 years - Annual fund fee: 0.57%. Risk indicator = 3
7. Age 80-89 years - Annual fund fee: 0.55%. Risk indicator = 3

Managed Funds - SuperLife KiwiSaver scheme​

1. SuperLifeIncome - Annual fund fee: 0.55%. This fund invests in income-producing assets, such as company shares that pay dividends. It is designed for investors that want to invest in both New Zealand and international fixed
   interest assets. Risk indicator = 3
2. SuperLife30 - Annual fund fee: 0.56%. This fund invests in Invests ~70% of its money in income assets such as term deposits and bonds, and ~30% in growth assets such as shares globally. SuperLife describes the fund as a conservative investment option. Risk indicator = 3.
3. Ethica - Annual fund fee: 0.69%. This fund invests in Invests in a mix of income and growth assets that are socially responsible - nothing that harms society or the environment will be included for example. The fund is designed for investors that want a balanced investment option. Risk indicator = 4
4. SuperLife60 - Annual fund fee: 0.59%. This fund invests Invests in a mix of income (40%) and growth (60%) assets and is designed for investors that want a balanced investment option, i.e. safe with an element of bank interest-beating returns. in Risk indicator = 3
5. SuperLife80 - Annual fund fee: 0.60%. This fund invests in Invests mostly in growth assets, with around 20% of the fund invested in income assets. This fund is designed for investors that want growth in their fund. Risk indicator = 4
6. SuperLife100 - Annual fund fee: 0.62%. This fund invests in Invests in growth assets, and is designed
   for investors wanting an aggressive investment option that invests in shares and property globally.  Risk indicator = 4​

To see more details on any fund, including recent returns and the specific assets it invests in, visit SuperLife's list of funds and click on the fund name. ​

Sector Funds – SuperLife KiwiSaver scheme

1. NZ Cash Fund - Annual fund fee: 0.52%. This fund invests in New Zealand cash and cash equivalent assets, including term deposits, and is designed for investors that want a low-risk investment option. Risk indicator = 1
2. NZ Bonds Fund - Annual fund fee: 0.54%. This fund invests in high credit grade government and company bonds in New Zealand. Risk indicator = 2
3. Overseas Bonds Fund - Annual fund fee: 0.59%. This fund invests in high credit grade government and company bonds around the world. Risk indicator = 3
4. Overseas Non-government Bonds Fund - Annual fund fee: 0.54%. This fund invests in company bonds around the world, primarily in the USA, Canada and Europe. Risk indicator = 3 
5. Property Fund - Annual fund fee: 0.58%. This fund invests in funds owning Australian (75%) and New Zealand (25%) property. Risk indicator = 4
6. NZ Shares Fund - Annual fund fee: 0.59%. This fund invests 88% of its money in the NZX 50 (New Zealand's top 50 companies by market valuation) and 12% in other New Zealand shares. Risk indicator = 4
7. Australian Shares Fund - Annual fund fee: 0.59%. This fund invests in Australian company shares of all sizes and operating in a number of sectors. Risk indicator = 5
8. Overseas Shares (Currency Hedged) Fund - Annual fund fee: 0.58%. This fund invests in American, European and Asia-Pacific shares with a focus on large companies. Risk indicator = 5
9. Overseas Shares Fund - Annual fund fee: 0.58%. This fund invests in American, European and Asia-Pacific shares with a focus on large companies. Because this fund is unhedged, if the New Zealand Dollar falls in value, the fund will increase in value as all assets are in overseas currencies. Risk indicator = 5
10. Emerging Markets Fund - Annual fund fee: 1.04%. This fund invests in shares in a range of sectors such as financials, technology and industrial in countries such as China, India and Mexico. Risk indicator = 5
11. UK Cash Fund - Annual fund fee: 0.49%. This fund invests in government bonds issued by the United Kingdom. The fund is also designed to make money from New Zealand Dollar and British Pound currency movements; as an example, if the British Pound gets stronger, the fund increases in value. Risk indicator = ​5

To see more details on any fund, including recent returns and the specific assets it invests in, visit SuperLife's list of funds and click on the fund name. ​

ETF Funds – SuperLife KiwiSaver scheme

1. NZ Cash ETF Fund - Annual fund fee: 0.52%. This fund invests in New Zealand cash and cash equivalent assets such as term deposits.  Risk indicator = 2
2. NZ Bond ETF Fund - Annual fund fee: 0.54%. This fund invests in New Zealand issued corporate and government bonds, i.e. investments which give a fixed percentage of interest. Risk indicator = 2
3. Global Bond ETF Fund - Annual fund fee: 0.59%. This fund invests in corporate and government bonds globally. Risk indicator = 3
4. NZ Dividend ETF Fund - Annual fund fee: 0.59%. This fund invests in New Zealand's top 25 dividend paying companies, such as Meridian Energy, Spark and Contact Energy. Such companies are highly profitable and return dividends as a priority over growth. Risk indicator = 4
5. NZ Top 50 ETF Fund - Annual fund fee: 0.59%. This fund invests in the 50 largest companies on the New Zealand sharemarket (for example, Spark, Auckland Airport and Fletcher Building). Risk indicator = 4
6. NZ Top 10 ETF Fund - Annual fund fee: 0.59%. This fund invests in the 10 largest listed New Zealand companies (for example, Fletcher Building, Sky City and Trade Me). Risk indicator = 5
7. NZ Mid Cap ETF Fund - Annual fund fee: 0.59%. This fund invests in  mid-sized New Zealand companies such as A2 Milk, Air New Zealand and Chorus. Risk indicator = 4
8. NZ Property ETF Fund - Annual fund fee: 0.59%. This fund invests in New Zealand companies that own commercial property, including Goodman Property, Kiwi Property and Precinct Property. Risk indicator = 4
9. Australian Top 20 ETF Fund - Annual fund fee: 0.59%. This fund invests in the 20 largest listed Australian companies (for example, Westpac, Commonwealth Bank and Telstra). Risk indicator = 5
10. Australian Dividend ETF Fund - Annual fund fee: 0.59%. This fund invests in Australia's top 50 dividend paying companies, such as Rio Tinto, Wesfarmers and Westpac. Such companies are highly profitable and return dividends as a priority over growth. Risk indicator = 5
11. Australian Financials ETF Fund - Annual fund fee: 0.59%. This fund invests primarily in shares in Australian banks and insurance companies. Risk indicator = 6
12. Australian Property ETF Fund - Annual fund fee: 0.59%. This fund invests in Australian companies that own commercial property. Risk indicator = 5
13. Australian Resources ETF Fund - Annual fund fee: 0.59%. This fund invests in Australian companies operating in the energy sector or the metals and mining industry. Companies include BHP, Rio Tinto and Santos. Risk indicator = 6
14. Australian Mid Cap ETF Fund - Annual fund fee: 0.59%. This fund invests in mid-sized Australian companies such as Seek, Bluescope Steel and Bank of Queensland. Risk indicator = 5
15. Total World ETF Fund - Annual fund fee: 0.60%. This fund invests in large American and global companies, such as Apple, Alphabet and Amazon. Risk indicator = 5
16. US 500 ETF Fund - Annual fund fee: 0.54%. This fund invests in the American S&P 500 index, which is America's largest 500 listed companies (for example, Apple, Alphabet and Coca-Cola). Risk indicator = 5
17. Europe ETF Fund - Annual fund fee: 0.59%. This fund invests in Europe's largest companies listed all over the EU and the UK, including Nestle, British American Tobacco and HSBC. Risk indicator = 5
18. Asia Pacific ETF Fund - Annual fund fee: 0.59%. This fund invests in Asia and Australia's largest companies, including Samsung, Westpac and AIA Group. Risk indicator = 5
19. US Large Growth ETF Fund - Annual fund fee: 0.57%. This fund invests in growth shares in America, often shares with low dividends and potential for higher future profits. Risk indicator = 5
20. US Large Value ETF Fund - Annual fund fee: 0.57%. This fund invests in large American companies - the more market value, the higher the percentage of investment. Risk indicator = 
21. US Mid Cap ETF Fund - Annual fund fee: 0.57%. This fund invests in mid-sized American companies. Risk indicator = 5
22. US Small Cap ETF Fund - Annual fund fee: 0.57%. This fund invests in small-sized American companies. Risk indicator = 5
23. Emerging Markets ETF Fund - Annual fund fee: 0.73%. This fund invests in companies in emerging countries such as China, Brazil, Taiwan and South Africa. Risk indicator = 5

To see more details on any fund, including recent returns and the specific assets it invests in, visit SuperLife's list of funds and click on the fund name. 

Who is SuperLife suited to?

With such a diverse number of funds, there is most likely a fund for the majority of KiwiSaver members. If you're looking for an actively managed fund supported by traders and analysts, the SuperLife offering may not meet your expectations. The "Managed Funds" invest in a mix of the sector and ETF funds, so it's not an actively managed fund. 
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Standout Features:

1. The diverse number of funds means you can focus on particular industry sectors in specific countries, such as Australian property, New Zealand property and global emerging markets.
2. The age-based funds combine common sense and practicality, and make a sensible option for KiwiSaver members looking for growth and protection. 
3. It's free to change funds; the $30 annual membership fee means you can move between funds as often as you like.
4. Fees are low - 38 of 41 funds have annual fees of between 0.50% and 0.70%.

​But be aware:

1. Many funds that invest in overseas assets will make investments in companies trading in weapons, tobacco, nuclear and other “unethical” business. Funds investing in New Zealand may also invest in SkyCity (gambling). Only one fund, Ethica, specifically invests in assets that don't have a "negative impact on social and community outcomes" or are otherwise detrimental to the planet. 
2. As with any investment, markets go up and down. The Dotcom bubble in the early 2000s sank global sharemarkets, as did the 2008 Global Financial Crisis. While many global sharemarkets are now at record highs, this is no guarantee of future earnings. SuperLife is clear on this fact, stating "negative annual returns may occur once in every 5-7 years on average". 
3. In some instances, similar or the same funds are cheaper elsewhere. In the table below, we see that two SuperLife non-KiwiSaver funds, the NZ Top 50 ETF Fund and NZ Bonds Fund, charge fees close what Simplicity charges for the same non-KiwiSaver funds. Over time, the small differences can add up to thousands of dollars, so it pays to shop around to find the lowest fee fund for the same asset class.

Investment Preference	SuperLife Fee	Simplicity Fee	$ Difference/year on $50,000 investment
​NZ Share Index Fund, i.e.  a find that follows the NZX50	0.49% ​(NZ Top 50 ETF Fund)	0.31% (NZ Share Fund)	$90
NZ Bond Funds, i.e. a fund that invests in government and company bonds	0.44% (NZ Bonds Fund)	0.31% (NZ Bond Index Fund)	$65

SuperLife - What You Need to Know

Claims made by SuperLife
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"Low fees and a broad range of investment options" AND
​"SuperLife's fees are among the lowest in the market" AND
"SuperLife is New Zealand’s only KiwiSaver provider offering both low fees and a broad range of investment options to suit your circumstances"

Is it True?
Yes, for the most part. The fees certainly are low - the Sorted KiwiSaver fees calculator confirms the majority of SuperLife's funds are in the lowest 30% of all KiwiSaver funds for fees. And with 41 funds to pick from, with unlimited free transfers, there is a wide choice. 

"There is no minimum investment and you can change your investment strategy any time, free of charge. You can also keep track of your KiwiSaver balance with our mobile app".“

Is it True?
Yes; SuperLife encourages online account management and tracking; your annual membership fee ($30) lets you change funds as often as you want.

"SuperLife will either invest in a fund designed to track an index or in a number of assets for the long-term".  

Is it True?
Yes; your fund has a specific objective that doesn't change, so you'll know where your money will be invested in at all times. For example, an Australian property fund will only invest in Australian property assets, a cash fund will only invest in bank and government deposits etc.  

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The Competition – SuperLife vs Simplicity

Simplicity is another option for index fund investing; their funds cover local and foreign ETFs directly via major international players such as Vanguard. Simplicity offers four index-based funds, with fees fixed at $30/year + 0.31% of funds invested. The funds include a proportion of investments in cash and bonds, so they’re not 100% in shares.

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What Others Are Saying
Personal finance journalist Mary Holm stated  "I like its low fees, its disclosures and the way it is run" in a Herald Article in 2007.

Interest.co.nz wrote in 2012 that "SuperLife offers a diverse range of multi-sector and single-sector options and there is something to suit almost everyone's risk appetite or investment preferences".

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The Bottom Line

• Overall, SuperLife offers the most diverse number of ETFs in New Zealand some of the lowest fees when compared to other providers. In addition to that, there are no joining fees, a $30 annual membership fee and you can transfer between funds for free as many times as you want. 
• But, similar funds appear on other platforms and can have cheaper management fees for KiwiSaver and non-KiwiSaver funds. For example, the Superlife NZ Top 50 ETF fund which directly follows the NZX 50 share index charges 0.49% per year, whereas Simplicity's equivalent (the NZ Share Fund) charges 0.31%. This calculates to be $90 per year in extra fees for a KiwiSaver balance of $50,000, and over 25 years that's ~$2,000. As such, it pays to shop around and compare fund fees if you're serious about having the biggest KiwiSaver nest-egg possible. 
• The underlying investment funds offer diversity in the sharemarket (both in New Zealand and overseas) without significant risk. While some may be classified as "active" on fund comparison sites, we see them as largely passive given there is no active trading in individual stocks and shares. 
• SuperLife may not appeal at first - if you’re new to KiwiSaver, the choice of 41 funds may be overwhelming. To give investors some idea, each fund has a risk number (1 = lowest, 7 = highest). All SuperLife funds range from risk number 2-4, meaning no funds are overly aggressive. 

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Limitations

• If you are chasing market-beating returns, you'll probably be more suited to an actively managed fund - something with SuperLife does not offer.

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10 Things to Know About SuperLife

SimpleLife isn’t just a KiwiSaver scheme; the funds are open to everyone

You won't be limited to one scheme with SuperLife if you want to invest in other funds outside of KiwiSaver. What's available to KiwiSaver members is available to everyone, so you can invest in separate fund(s) or contribute more to your KiwiSaver fund. 
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It doesn't matter what your employer's default KiwiSaver provider or fund is - you can select SuperLife and the fund you want

An employer's default provider is often mistaken for the only option available, but any of the 25+ providers and their funds are available to you. SuperLife may be unknown to your employer, but you're 100% entitled to pick it as your provider. 

SuperLife offers excellent investment diversification

An investment in one SuperLife fund means you’re putting money into a number of companies, so if one doesn’t perform as expected the strength of other companies will balance out the bad eggs. For example, the NZ Top 50 ETF Fund invests in the 50 largest New Zealand listed companies, so you are well diversified. Other funds invest in 500 or more companies, meaning you are even more diversified. 
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There is no minimum investment and it's easy to take contribution holidays

As a SuperLife member, you'll pay the $30 annual membership fee. This gives you the freedom to invest as you like. And if you want to contribute above your fixed salary contribution, you can do this as little as often as you like. 
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The performance of SuperLife is transparent

You can check the 1 month, 12 month, 1 year, 3 year and 5 year return on any SuperLife fund at any time by visiting the SuperLife investor report web page.  You'll be able to see the fees for each fund. 
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Dividends your fund(s) receive are reinvested, meaning more cash is invested on your behalf

Many of the shares your ETF invests in pay dividends. These cash payments represent the profits from companies returning it to the shareholders, i.e. you. When a company declares a dividend, your fund will receive money and it is re-invested, growing the value of your fund. With KiwiSaver funds, there is no option to take this money as cash until you turn 65, whereby you can invest it in the SuperLife's NZ Cash fund.

SuperLife offers a proven investment model by investing in index funds

Index funds historically outperform managed funds. According to Fortune Magazine, the S&P 500 (a major American sharemarket index) outperformed more than 82% of all active funds over a 15-year period. Given the low fees an index fund charges and the reliability in outperforming active funds, it's a relatively conservative approach to investment for your retirement.
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SuperLife isn't the only KiwiSaver index fund provider on the market

Simplicity KiwiSaver is just one example of a provider specialising in index and/or passive funds - many others compete with SuperLife for your KiwiSaver contributions. The fees between providers vary, and as more entrants come to the market, we expect the fees charged to fall as competition heats up.
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SuperLife makes its investment philosophy clear

To make sure KiwiSaver members don't participate in a fund that doesn't suit their investment needs, SuperLife outlines the principles that underlie the Scheme’s broad investment philosophy as: 

1. Passive: SuperLife believes "a passive approach to investing will deliver better long-term results...and that they "do not think that constantly changing our investments (that is, trading regularly and seeking short-term gains), consistently adds value to investors".
2. Cost-effective: SuperLife makes "decisions based on what is practical, sensible and for the long-term. All decisions must be cost-effective – the return to you is improved by the careful management of costs".
3. Diversified: SuperLife believes that "better and more consistent outcomes result from diversification....investing in a number of investments and reducing your risk by doing so". 
4. Simple: SuperLife "aims to keep things simple".

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​Signing up isn't Complicated, but you’ll need to decide what fund(s) to invest in first

Signing up to SuperLife is relatively simple, but you’ll need to decide you fund first. If you're not sure of want to have a range of options to pick from, look at Sorted's FundFinder tool. 

Our Conclusion​

• We like that SuperLife charges $30 per year to be a member and charges relatively low fees for KiwiSaver funds as a whole.  
• The 41 funds offer diversity - from specialist asset classes (i.e. property, ethical and cash) to specific indexes (i.e. New Zealand sharemarket, Australian sharemarket, emerging markets), there is something for anyone looking for a low-fees fund that can perform alongside the actively managed funds that command higher fees. 
• SuperLife has extensive guidance on its website covering a range of topics which builds up an investor-friendly knowledge bank. 
• The SuperLife app compliments the scheme's commitment to KiwiSaver investing being transparent and cost-effective.