Warren Buffett Has Underperformed the Stock Market for the Last 20 Years

[Entrep]

Came across this https://www.linkedin.com/pulse/warren-buffett-has-underperformed-sp-500-last-20-years-jain-cfa/ and wondered if any of you have an opinion on it.

AI summary for ease:


The writer begins by expressing admiration for Warren Buffett due to his success, integrity, wisdom, and affable nature. However, this admiration doesn't prevent the author from analyzing Buffett’s recent performance critically. According to the information provided, Berkshire Hathaway, under Buffett's leadership, has underperformed the stock market for the last 20 years. The author refers to a table from Buffett’s 2022 letter to shareholders that reveals this trend, highlighting a shift in the company's performance over the years.

Berkshire Hathaway had historically outperformed the S&P 500. From 1965 to 2002, the company enjoyed significant growth, yielding a compounded annual return of 25.66% compared to the S&P 500’s 10.02%. This trend began to change around 2003. For the subsequent 20 years, the S&P 500 delivered a 9.80% compounded annual return, slightly outperforming Berkshire’s 9.75%. This revelation leads the author to question the wisdom of chasing outperformance, an endeavor even the likes of Buffett has struggled with in recent decades.

This analysis introduces a broader critique of the practice of seeking extraordinary performance in investment. The writer cites data showing the underperformance of professional investment managers compared to market indices. A report for 2022 is mentioned, indicating that 93.40% of all actively managed large-cap US funds underperformed the S&P 500 over a 15-year period. In light of this, the author suggests that Berkshire’s slight underperformance is not an anomaly but rather indicative of a broader trend.

This realization forms the basis for advocating for a different investment strategy: index funds. The author suggests that low-cost index funds, while not exciting, offer stability and consistent returns over the long term. The absence of the need to outperform the market alleviates anxiety and the hassle associated with the constant movement between investments. The writer argues that the inability of a distinguished investor like Buffett to consistently outperform a broad market index over two decades should prompt a reevaluation of individual investment strategies.

[JeffW]

Came across this https://www.linkedin.com/pulse/warren-buffett-has-underperformed-sp-500-last-20-years-jain-cfa/ and wondered if any of you have an opinion on it.

AI summary for ease:

I'm certainly not arguing against the thesis, but hypothetically if every investor adopted an Index Fund approach, how would share prices ever be derived?

[kiora]

Size matters
"To investigate fund size and performance, the authors use regression analysis and cross-sectional analysis and find that the common notions of declining expenses and returns are mostly true. Their analysis shows that a change in the size of a fund equal to a two-standard-deviation shock in the log of a fund's total assets yields a decline of 5.4 to 7.7 bps in monthly performance. This impact is approximately 65–96 bps annually before fees"
https://rpc.cfainstitute.org/en/research/cfa-digest/2005/08/does-fund-size-erode-mutual-fund-performance-the-role-of-liquidity-and-organization-digest-su#:~:text=As%20small%2Dcap%20funds%20grow,than%20 smaller%20small%2Dcap%20funds.

Picking leaders matters as does time frame

https://finance.yahoo.com/chart/IFT.NZ?p=IFT.NZ#eyJpbnRlcnZhbCI6IndlZWsiLCJwZXJpb2 RpY2l0eSI6MSwidGltZVVuaXQiOm51bGwsImNhbmRsZVdpZHRo IjoxLjQyODgyMjQ5NTYwNjMyNywiZmxpcHBlZCI6ZmFsc2UsIn ZvbHVtZVVuZGVybGF5Ijp0cnVlLCJhZGoiOnRydWUsImNyb3Nz aGFpciI6dHJ1ZSwiY2hhcnRUeXBlIjoibGluZSIsImV4dGVuZG VkIjpmYWxzZSwibWFya2V0U2Vzc2lvbnMiOnt9LCJhZ2dyZWdh dGlvblR5cGUiOiJvaGxjIiwiY2hhcnRTY2FsZSI6InBlcmNlbn QiLCJwYW5lbHMiOnsiY2hhcnQiOnsicGVyY2VudCI6MSwiZGlz cGxheSI6IklGVC5OWiIsImNoYXJ0TmFtZSI6ImNoYXJ0IiwiaW 5kZXgiOjAsInlBeGlzIjp7Im5hbWUiOiJjaGFydCIsInBvc2l0 aW9uIjpudWxsfSwieWF4aXNMSFMiOltdLCJ5YXhpc1JIUyI6Wy JjaGFydCIsIuKAjHZvbCB1bmRy4oCMIl19fSwic2V0U3BhbiI6 bnVsbCwibGluZVdpZHRoIjoyLCJzdHJpcGVkQmFja2dyb3VuZC I6dHJ1ZSwiZXZlbnRzIjp0cnVlLCJjb2xvciI6IiMwMDgxZjIi LCJzdHJpcGVkQmFja2dyb3VkIjp0cnVlLCJyYW5nZSI6bnVsbC wiZXZlbnRNYXAiOnsiY29ycG9yYXRlIjpbXSwic2lnRGV2Ijp7 fX0sImN1c3RvbVJhbmdlIjpudWxsLCJzeW1ib2xzIjpbeyJzeW 1ib2wiOiJJRlQuTloiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9s IjoiSUZULk5aIiwicXVvdGVUeXBlIjoiRVFVSVRZIiwiZXhjaG FuZ2VUaW1lWm9uZSI6IlBhY2lmaWMvQXVja2xhbmQifSwicGVy aW9kaWNpdHkiOjEsImludGVydmFsIjoid2VlayIsInRpbWVVbm l0IjpudWxsLCJzZXRTcGFuIjpudWxsfSx7InN5bWJvbCI6Ik1G VC5OWiIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJNRlQuTl oifSwicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoid2VlayIs InRpbWVVbml0IjpudWxsLCJzZXRTcGFuIjpudWxsLCJpZCI6Ik 1GVC5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZTU2MzJh Iiwid2lkdGgiOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcm VZQXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1i b2xPYmplY3QiOnsic3ltYm9sIjoiTUZULk5aIn0sInBhbmVsIj oiY2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFk ZC1zZXJpZXMiLCJzeW1ib2wiOiJNRlQuTloiLCJnYXBEaXNwbG F5U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJNRlQuTloi LCJvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cn VlLCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEs ImhpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3 R5bGUiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFs c2V9fSx7InN5bWJvbCI6IkVCTy5OWiIsInN5bWJvbE9iamVjdC I6eyJzeW1ib2wiOiJFQk8uTloifSwicGVyaW9kaWNpdHkiOjEs ImludGVydmFsIjoid2VlayIsInRpbWVVbml0IjpudWxsLCJzZX RTcGFuIjpudWxsLCJpZCI6IkVCTy5OWiIsInBhcmFtZXRlcnMi OnsiY29sb3IiOiIjZmYzMzNhIiwid2lkdGgiOjIsImlzQ29tcG FyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnRO YW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIj oiRUJPLk5aIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6 ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOi JFQk8uTloiLCJnYXBEaXNwbGF5U3R5bGUiOiJ0cmFuc3BhcmVu dCIsIm5hbWUiOiJFQk8uTloiLCJvdmVyQ2hhcnQiOnRydWUsIn VzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdl IjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydW UsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFy dCIsImhpZ2hsaWdodCI6ZmFsc2V9fSx7InN5bWJvbCI6IkZQSC 5OWiIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJGUEguTloi fSwicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoid2VlayIsIn RpbWVVbml0IjpudWxsLCJzZXRTcGFuIjpudWxsLCJpZCI6IkZQ SC5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZmZkYjQ4Ii wid2lkdGgiOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZ QXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2 xPYmplY3QiOnsic3ltYm9sIjoiRlBILk5aIn0sInBhbmVsIjoi Y2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC 1zZXJpZXMiLCJzeW1ib2wiOiJGUEguTloiLCJnYXBEaXNwbGF5 U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJGUEguTloiLC JvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVl LCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsIm hpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5 bGUiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2 V9fSx7InN5bWJvbCI6IkJSSy1BIiwic3ltYm9sT2JqZWN0Ijp7 InN5bWJvbCI6IkJSSy1BIn0sInBlcmlvZGljaXR5IjoxLCJpbn RlcnZhbCI6IndlZWsiLCJ0aW1lVW5pdCI6bnVsbCwic2V0U3Bh biI6bnVsbCwiaWQiOiJCUkstQSIsInBhcmFtZXRlcnMiOnsiY2 9sb3IiOiIjNzJkM2ZmIiwid2lkdGgiOjQsImlzQ29tcGFyaXNv biI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnROYW1lIj oiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiQlJL LUEifSwicGFuZWwiOiJjaGFydCIsImZpbGxHYXBzIjpmYWxzZS wiYWN0aW9uIjoiYWRkLXNlcmllcyIsInN5bWJvbCI6IkJSSy1B IiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbnQiLCJuYW 1lIjoiQlJLLUEiLCJvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0 TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm 9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydWUsInR5cGUi OiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFydCIsImhpZ2 hsaWdodCI6ZmFsc2V9fV0sInN0dWRpZXMiOnsi4oCMdm9sIHVu ZHLigIwiOnsidHlwZSI6InZvbCB1bmRyIiwiaW5wdXRzIjp7Im lkIjoi4oCMdm9sIHVuZHLigIwiLCJkaXNwbGF5Ijoi4oCMdm9s IHVuZHLigIwifSwib3V0cHV0cyI6eyJVcCBWb2x1bWUiOiIjMD BiMDYxIiwiRG93biBWb2x1bWUiOiIjZmYzMzNhIn0sInBhbmVs IjoiY2hhcnQiLCJwYXJhbWV0ZXJzIjp7IndpZHRoRmFjdG9yIj owLjQ1LCJjaGFydE5hbWUiOiJjaGFydCIsInBhbmVsTmFtZSI6 ImNoYXJ0In19fX0-

Shorter time frame
https://finance.yahoo.com/chart/IFT.NZ?p=IFT.NZ#eyJpbnRlcnZhbCI6IndlZWsiLCJwZXJpb2 RpY2l0eSI6MSwidGltZVVuaXQiOm51bGwsImNhbmRsZVdpZHRo IjozLjExNDk0MjUyODczNTYzMjMsImZsaXBwZWQiOmZhbHNlLC J2b2x1bWVVbmRlcmxheSI6dHJ1ZSwiYWRqIjp0cnVlLCJjcm9z c2hhaXIiOnRydWUsImNoYXJ0VHlwZSI6ImxpbmUiLCJleHRlbm RlZCI6ZmFsc2UsIm1hcmtldFNlc3Npb25zIjp7fSwiYWdncmVn YXRpb25UeXBlIjoib2hsYyIsImNoYXJ0U2NhbGUiOiJwZXJjZW 50IiwicGFuZWxzIjp7ImNoYXJ0Ijp7InBlcmNlbnQiOjEsImRp c3BsYXkiOiJJRlQuTloiLCJjaGFydE5hbWUiOiJjaGFydCIsIm luZGV4IjowLCJ5QXhpcyI6eyJuYW1lIjoiY2hhcnQiLCJwb3Np dGlvbiI6bnVsbH0sInlheGlzTEhTIjpbXSwieWF4aXNSSFMiOl siY2hhcnQiLCLigIx2b2wgdW5kcuKAjCJdfX0sInNldFNwYW4i OnsibXVsdGlwbGllciI6NSwiYmFzZSI6InllYXIiLCJwZXJpb2 RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2VlayJ9 fSwibGluZVdpZHRoIjoyLCJzdHJpcGVkQmFja2dyb3VuZCI6dH J1ZSwiZXZlbnRzIjp0cnVlLCJjb2xvciI6IiMwMDgxZjIiLCJz dHJpcGVkQmFja2dyb3VkIjp0cnVlLCJldmVudE1hcCI6eyJjb3 Jwb3JhdGUiOltdLCJzaWdEZXYiOnt9fSwiY3VzdG9tUmFuZ2Ui Om51bGwsInN5bWJvbHMiOlt7InN5bWJvbCI6IklGVC5OWiIsIn N5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJJRlQuTloiLCJxdW90 ZVR5cGUiOiJFUVVJVFkiLCJleGNoYW5nZVRpbWVab25lIjoiUG FjaWZpYy9BdWNrbGFuZCJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50 ZXJ2YWwiOiJ3ZWVrIiwidGltZVVuaXQiOm51bGwsInNldFNwYW 4iOnsibXVsdGlwbGllciI6NSwiYmFzZSI6InllYXIiLCJwZXJp b2RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2Vlay J9fX0seyJzeW1ib2wiOiJNRlQuTloiLCJzeW1ib2xPYmplY3Qi Onsic3ltYm9sIjoiTUZULk5aIn0sInBlcmlvZGljaXR5IjoxLC JpbnRlcnZhbCI6IndlZWsiLCJ0aW1lVW5pdCI6bnVsbCwic2V0 U3BhbiI6eyJtdWx0aXBsaWVyIjo1LCJiYXNlIjoieWVhciIsIn BlcmlvZGljaXR5Ijp7InBlcmlvZCI6MSwiaW50ZXJ2YWwiOiJ3 ZWVrIn19LCJpZCI6Ik1GVC5OWiIsInBhcmFtZXRlcnMiOnsiY2 9sb3IiOiIjZTU2MzJhIiwid2lkdGgiOjIsImlzQ29tcGFyaXNv biI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnROYW1lIj oiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiTUZU Lk5aIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2 UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOiJNRlQu TloiLCJnYXBEaXNwbGF5U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm 5hbWUiOiJNRlQuTloiLCJvdmVyQ2hhcnQiOnRydWUsInVzZUNo YXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIjowLj csIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydWUsInR5 cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFydCIsIm hpZ2hsaWdodCI6ZmFsc2V9fSx7InN5bWJvbCI6IkVCTy5OWiIs InN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJFQk8uTloifSwicG VyaW9kaWNpdHkiOjEsImludGVydmFsIjoid2VlayIsInRpbWVV bml0IjpudWxsLCJzZXRTcGFuIjp7Im11bHRpcGxpZXIiOjUsIm Jhc2UiOiJ5ZWFyIiwicGVyaW9kaWNpdHkiOnsicGVyaW9kIjox LCJpbnRlcnZhbCI6IndlZWsifX0sImlkIjoiRUJPLk5aIiwicG FyYW1ldGVycyI6eyJjb2xvciI6IiNmZjMzM2EiLCJ3aWR0aCI6 MiwiaXNDb21wYXJpc29uIjp0cnVlLCJzaGFyZVlBeGlzIjp0cn VlLCJjaGFydE5hbWUiOiJjaGFydCIsInN5bWJvbE9iamVjdCI6 eyJzeW1ib2wiOiJFQk8uTloifSwicGFuZWwiOiJjaGFydCIsIm ZpbGxHYXBzIjpmYWxzZSwiYWN0aW9uIjoiYWRkLXNlcmllcyIs InN5bWJvbCI6IkVCTy5OWiIsImdhcERpc3BsYXlTdHlsZSI6In RyYW5zcGFyZW50IiwibmFtZSI6IkVCTy5OWiIsIm92ZXJDaGFy dCI6dHJ1ZSwidXNlQ2hhcnRMZWdlbmQiOnRydWUsImhlaWdodF BlcmNlbnRhZ2UiOjAuNywib3BhY2l0eSI6MSwiaGlnaGxpZ2h0 YWJsZSI6dHJ1ZSwidHlwZSI6ImxpbmUiLCJzdHlsZSI6InN0eF 9saW5lX2NoYXJ0IiwiaGlnaGxpZ2h0IjpmYWxzZX19LHsic3lt Ym9sIjoiRlBILk5aIiwic3ltYm9sT2JqZWN0Ijp7InN5bWJvbC I6IkZQSC5OWiJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50ZXJ2YWwi OiJ3ZWVrIiwidGltZVVuaXQiOm51bGwsInNldFNwYW4iOnsibX VsdGlwbGllciI6NSwiYmFzZSI6InllYXIiLCJwZXJpb2RpY2l0 eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2VlayJ9fSwiaW QiOiJGUEguTloiLCJwYXJhbWV0ZXJzIjp7ImNvbG9yIjoiI2Zm ZGI0OCIsIndpZHRoIjoyLCJpc0NvbXBhcmlzb24iOnRydWUsIn NoYXJlWUF4aXMiOnRydWUsImNoYXJ0TmFtZSI6ImNoYXJ0Iiwi c3ltYm9sT2JqZWN0Ijp7InN5bWJvbCI6IkZQSC5OWiJ9LCJwYW 5lbCI6ImNoYXJ0IiwiZmlsbEdhcHMiOmZhbHNlLCJhY3Rpb24i OiJhZGQtc2VyaWVzIiwic3ltYm9sIjoiRlBILk5aIiwiZ2FwRG lzcGxheVN0eWxlIjoidHJhbnNwYXJlbnQiLCJuYW1lIjoiRlBI Lk5aIiwib3ZlckNoYXJ0Ijp0cnVlLCJ1c2VDaGFydExlZ2VuZC I6dHJ1ZSwiaGVpZ2h0UGVyY2VudGFnZSI6MC43LCJvcGFjaXR5 IjoxLCJoaWdobGlnaHRhYmxlIjp0cnVlLCJ0eXBlIjoibGluZS IsInN0eWxlIjoic3R4X2xpbmVfY2hhcnQiLCJoaWdobGlnaHQi OmZhbHNlfX0seyJzeW1ib2wiOiJCUkstQSIsInN5bWJvbE9iam VjdCI6eyJzeW1ib2wiOiJCUkstQSJ9LCJwZXJpb2RpY2l0eSI6 MSwiaW50ZXJ2YWwiOiJ3ZWVrIiwidGltZVVuaXQiOm51bGwsIn NldFNwYW4iOnsibXVsdGlwbGllciI6NSwiYmFzZSI6InllYXIi LCJwZXJpb2RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIj oid2VlayJ9fSwiaWQiOiJCUkstQSIsInBhcmFtZXRlcnMiOnsi Y29sb3IiOiIjNzJkM2ZmIiwid2lkdGgiOjQsImlzQ29tcGFyaX NvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnROYW1l IjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiQl JLLUEifSwicGFuZWwiOiJjaGFydCIsImZpbGxHYXBzIjpmYWxz ZSwiYWN0aW9uIjoiYWRkLXNlcmllcyIsInN5bWJvbCI6IkJSSy 1BIiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbnQiLCJu YW1lIjoiQlJLLUEiLCJvdmVyQ2hhcnQiOnRydWUsInVzZUNoYX J0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIjowLjcs Im9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydWUsInR5cG UiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFydCIsImhp Z2hsaWdodCI6ZmFsc2V9fV0sInN0dWRpZXMiOnsi4oCMdm9sIH VuZHLigIwiOnsidHlwZSI6InZvbCB1bmRyIiwiaW5wdXRzIjp7 ImlkIjoi4oCMdm9sIHVuZHLigIwiLCJkaXNwbGF5Ijoi4oCMdm 9sIHVuZHLigIwifSwib3V0cHV0cyI6eyJVcCBWb2x1bWUiOiIj MDBiMDYxIiwiRG93biBWb2x1bWUiOiIjZmYzMzNhIn0sInBhbm VsIjoiY2hhcnQiLCJwYXJhbWV0ZXJzIjp7IndpZHRoRmFjdG9y IjowLjQ1LCJjaGFydE5hbWUiOiJjaGFydCIsInBhbmVsTmFtZS I6ImNoYXJ0In19fX0-

[SBQ]

You can cherry pick time frames to suit the narrative and timing DOES matter when you buy BRKA/B. It would not take much to have a higher return buying BRK stock if you bought at levels below the start of the year. Likewise you could fare worse if you bought at the highs of each year.

The bottom line is not all investments are equal from a tax perspective. Does owning an index ETF like VOO net you a better return under Kiwi Saver? You wil find after 40 or 50 years of compounding, 2/3rds of the gains would be loss through NZ's FIF tax and various mgt fees deducted every year.