in a nutshell

Annual Fee: 0.25% to 0.45%

Performance Fee: 0%

Funds Available: 17

Government Default Fund? No

Kernel is the cheapest Kiwisaver scheme we know of that allows you to invest in international and domestic equities, with a management fee of 0.25% p.a. for core funds, and no admin or performance fee. It allows you to invest your Kiwisaver in one of three pre-made funds, or you can select your own mix of investments from their 17 managed funds.

Our opinion: We think Kernel is one of the best Kiwisaver offerings on the market today, giving investors the perfect balance of active and passive investment. All your funds will be indexed, but you get to choose specifically which funds and can mix and match as you like. At 0.25% p.a., it's also the best value scheme available today.

Who Is Kernel?

Kernel is a new investment manager that was founded in 2019 by a former funds team from NZX.

Kernel own and manage all their own index funds, meaning they have some unique funds that you don't see at other providers.

Kernel's Kiwisaver offering is unique in that it lets you pick and choose your own mix of funds, so if you want to invest 10% in one index and 90% in another index, you can simply select this on the app and it will allocate the funds for you.

It's still a reasonably unknown provider, but has already acquired a sizeable level of AUM in just a few years.

Are Kernel's Fees Lower Than Other Kiwisaver Funds?

As far as we know, Kernel offers the lowest Kiwisaver fees on the market today for equity based funds.

14 of their funds come with a flat management fee of 0.25%, while their three specialised funds are higher at 0.45% p.a.

There is no annual admin fee or performance fees for any of their funds.

The next lowest fee provider we know of is Simplicity, with a flat fee of 0.3%.

If you're looking for a low-fee fund for a passive indexing strategy, there is currently no better option than Kernel.

What Kiwisaver Funds Does Kernel Offer?

Kernel offers three pre-made diversified funds:

Balanced Fund

Growth Fund

Cash Fund

These funds are technically not index funds, but a mix of various index funds that Kernel owns and manages.

For example, in the Balanced fund, you might have a mix of the NZX 20, the S&P500 and the Global 100 funds, as an example.

As of 2023, the asset allocations of each funds are as follows:

Balanced Fund

Equities 98%

Cash 2%

Growth Fund

Equities 60%

Cash 40%

Cash Fund

Cash 100%

To get the exact mix of assets in each, you will need to see the latest fund updates on their website.

Mix and match your own!

This is where Kernel gets interesting.

If you don't like their pre-made funds, you can create your own.

For example, you could decide to have 33% of your Kiwisaver in NZ stocks, 33% in US stocks, and 33% in global stocks.

There is no specific fund with that makeup, but you can simply tell Kernel to allocate your Kiwisaver funds in those percentages to different funds and they'll do it for you.

You can manage it all within your dashboard like so:

As of now, Kernel has 17 different funds to choose from:

Ready made funds:

  • High Growth fund invests in 98% growth assets.
  • Balanced fund invests in a diversified allocation of 60% shares and 40% cash and bonds.
  • Cash Plus fund invests in short-term interest bearing assets and other NZ fixed income.


  • Global 100 fund invests in 100 of the largest and most established companies across major equity markets worldwide.
  • Global 100 NZD Hedged fund as above but hedged for NZD.
  • S&P Global Dividend Aristocrats fund invests in global companies with a record of maintaining and raising their dividend over many years.
  • Global Clean Energy fund invests in global companies involved in the production or provision of clean energy.
  • S&P Kensho Moonshots Innovation fund invests in innovative US-listed companies that are developing disruptive technologies in all industries.
  • S&P Kensho Electric Vehicle Innovation fund invests in a diversified mix of global companies involved in the development of electric vehicles and green energy.
  • Global Infrastructure fund invests in utilities, storage and telecommunications infrastructure such as airports, railways and power generators.
  • Hedged Global Infrastructure fund as above but hedged for NZD.
  • Global Green Property fund invests in global real estate companies weighted towards environmental responsibility.
  • S&P 500 fund invests in the S&P500 index.

New Zealand:

  • NZ 20 fund invests in twenty of NZ’s largest companies.
  • NZ Small & Mid Cap Opportunities invests in a broad range of smaller companies listed on the NZX, outside of the Kernel NZ 20 fund.
  • NZ Commercial Property fund invests in the eight listed property trusts on the NZX.
  • NZ 50 ESG Tilted fund invests in the S&P/NZX 50 companies while tilting the weightings based on their sustainability/ESG factors.

You can get more details on each of these funds on their website.

What Is Kernel's Investment Strategy?

Kernel's funds are based on a passive indexing strategy.

This is from their SIPO document:

The Kernel High Growth Fund provides diversified exposure to growth assets, investing into a combination of other Kernel Funds. 

The Kernel Balanced Fund provides diversified exposure to both income and growth assets investing mainly in other Kernel Funds.

The Kernel Cash Plus Fund invests in short-term Fixed Income instruments and other cash and cash equivalents designed to generate an investment return that reflects the return of the Bloomberg NZ Bond Bank Bill Index.

All other Funds are equity index funds (“Kernel Equity Funds”) designed to generate an investment return that reflects the return of the index being tracked by the relevant Fund.

This means Kernel does not attempt to beat the market, and simply invests in broad based index funds to match the market average.

This means when investing your Kiwisaver with Kernel, you will receive the market average return on your investments over the long run.

This varies widely obviously, but typically ranges 7% to 10% per year for shares, and 2% to 5% for fixed interest, depending largely on the economy and geography.

Also be aware that their pre-made funds are a combination of different indexes, so if the Balanced fund is invested in five different index funds, you will get the average return of those five funds.

How Have The Funds Performed?

As Kernel has only been around since 2019, we don't have a lot of data on how their funds are performing.

However, you can check their latest returns on their funds page.

How Should I Invest My Kiwisaver With Kernel?

If you are not well versed in stock investing, it's advisable you try not to get too clever with choosing your funds.

The soundest advice for anyone who "isn't sure" is to simply elect for the Balanced fund and leave it alone.

If you have some experience with the markets, then it's okay for you to pick and choose a few other funds if you want to.

However, based on historic trends, you should get satisfactory returns adopting a "set and forget" strategy and simply electing for the Balanced fund, or if you have a time horizon of 20+ years (if you're aged 45 or younger) you could elect for the High Growth Fund.

Both these strategies have shown very strong results over long periods of time.

Can I Lose Money With Kernel?

All investing contains risk, and Kiwisaver is no different.

However, Kernel uses a time-tested strategy known as passive indexing, which doesn't attempt to trade individual stocks and instead invests in the entire market.

This strategy contains far less risk. In theory, as long as the economy grows over the long term, a passive stock market index will make money. 

In fact, over periods of 20 years or more, the US stock market has a 100% chance of returning a profit.

That doesn't mean losing money is impossible, but it is very unlikely over the long term in most of Kernel's funds.

The exception is if you choose a "niche" or "specialised" fund such as their electric vehicle fund or global green property fund.

Thematic funds like these are not time-tested and track very specific niches or industries, meaning you are at a much larger risk of losing money than if you simply elected for the Balanced or Growth funds, which simply invest in the world's largest companies.

If you're concerned about losing money, it's advisable that you stick with the bigger, established funds.

How To Withdraw My Kernel Kiwisaver?

No matter which Kiwisaver provider you choose, whether it's Kernel or someone else, your savings are locked in Kiwisaver until age 65.

However, there are some exceptions when your Kiwisaver can be withdrawn early:

These are:

  • You are experiencing serious financial hardship.
  • You have moved overseas.
  • You have a life-shortening medical condition (e.g. cancer).
  • You have a serious illness or disability (affecting your working ability).
  • You have died (your family can access).

You can also withdraw your Kiwisaver to put towards buying your first home.

What Happens If Kernel Goes Bankrupt?

This is a great question. 

KiwiSaver is privately managed by banks and/or investment managers. To be a Kiwisaver provider, they must be licensed by the Financial Markets Authority, and are audited annually.

Kernel is a default government provider, meaning it has received the government's stamp of approval that they are a trustworthy and recommended provider.

And even then, what happens to Kernel is actually irrelevant. Kernel is simply the manager of your funds, but they don't own your funds. Your money is actually held in a third party trust, which means Kernel never has access to it.

Kernel can only give instructions on which stocks and bonds your money gets invested in, but they can't get access to your money to use themselves, such as for paying their bills.

This means if Kernel goes bankrupt, your Kiwisaver savings will be protected by the trust, and will simply be moved to another provider (presumably of your choice or the government's choice).

Verdict: Who Is Kernel Suited For?

Due to the range of funds, we think Kernel is a great fit for almost all New Zealanders.

Not only can you invest in passive index funds, you can diversify over a range of different index funds which not only spreads your risk, but will give you a larger amount of control over your Kiwisaver.

As all Kernel funds invest in an index, getting a satisfactory return on your savings is as simple as "set and forget". There is no active trading done by the managers, they simply rely on the fact that over a 30 or 40 year period, the economy will grow and as a result your investment will grow with it.

If you have a 20+ year time horizon (meaning you're aged 45 or younger) you are perfectly suited for Kernel's Growth or Balanced funds, as the fees are the lowest you will find and you can simply enjoy the long term compounding.

If you're over 45, you may wish to opt for a more conservative fund such as the Dividend Aristocrats fund, which invests in some of the world's most stable and established companies.

This ability to mix and match between 17 different specialised index funds is a first in Kiwisaver, and something we will expect to get more popular in the coming years.

The one type of investor who may not want their Kiwisaver with Kernel is someone who wants to a manager to invest aggressively in individual stocks to try and beat the market. This is a much higher risk strategy and the opposite of what Kernel offers, though there are fund managers out there who offer it.

How To Sign Up For Kiwisaver With Kernel

You can sign up for Kernel on their homepage by clicking the yellow button below.

Simply open an account and enter your IRD number, and they will transfer your Kiwisaver to their platform.

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