Insights
What is a Benchmark
What a benchmark is, how it works and what we use at Pathfinder.
What is a Benchmark?
Fund managers choose a market index against which they review the performance of their fund. Once selected this is commonly referred to as the fund’s 'Benchmark’. The name of the benchmark is the name of the market index (or composite of indices) they've selected.
The benchmark represents how a relevant market or asset class has performed over the same period, helping investors understand whether a fund has kept up with, exceeded, or lagged the market. Benchmarks aren’t targets or guarantees — they’re a yardstick for context, helping to show whether results came from market movements or from the fund manager’s decisions and approach (including in areas such as ethical exclusions).
Choosing the right benchmark to compare a fund against is important. For example, if your fund is mostly invested in property you would want to compare it with a benchmark that also invested in property or real estate. Essentially, you're looking to compare apples with apples to a reasonable extent.
Pathfinder's benchmarks
Each Pathfinder Fund has its own benchmark. Pathfinder is required by law to disclose information on the past performance of each of the Pathfinder Funds and the performance of the fund benchmark must be included alongside our performance information. At Pathfinder, we've made the decision to compare (in terms of the benchmarks we use) our ethically invested funds against traditionally invested funds. This is because we believe our ethical investing approach should stack up in the long term, in terms of returns, with a traditional approach, and we want people to view them as in the same league.
Note that there’s no market-standard index that applies to all funds in the same risk category.
What has Pathfinder changed?
We have changed the benchmarks for our Pathfinder KiwiSaver Plan Funds, Pathfinder Ethical Growth Fund, Pathfinder Global Responsibility Fund and Pathfinder Global Water Fund. The changes take effect from 1 May 2026.
When we change our benchmark, following international industry standards, we do so only on a prospective basis, meaning the new benchmark would be used only after the change date.
This doesn't change the historical benchmark performance we've reported. It only affects our future reporting (from the date of the change, in this case 1 May 2026).
The following table outlines the indices we use to report benchmark performance for the relevant Funds, and shows the changes that have occurred over time.
| Pathfinder KiwiSaver Funds | Benchmark performance before 1 Dec 2021 | Benchmark performance between 1 Dec 2021 to 30 April 2026 [1] | Benchmark performance from 1 May 2026 |
|---|---|---|---|
| Conservative Fund | 20% Bloomberg NZ Bank Bill Index, 60% Bloomberg Barclays Global Aggregate Total Return Unhedged (gross of interest and tax; 100% hedged to NZD) & 20% Morningstar Developed Markets Net Index (net of dividends and tax; 50% hedged to NZD) | Morningstar® Target Allocation IndexTM: Conservative Multisector for New Zealand | Morningstar® New Zealand Conservative Target Allocation Plus Net Return NZD |
| Balanced Fund | 10% Bloomberg NZ Bank Bill Index, 30% Bloomberg Barclays Global Aggregate Total Return Index Unhedged (gross of interest and tax;100% hedged to NZD) and 60% Morningstar Developed Markets Net Return Index (net of tax and dividends, and 50% hedged to NZD). | Morningstar® Target Allocation IndexTM: Balanced Multisector for New Zealand | Morningstar® New Zealand Balanced Target Allocation Plus Net Return NZD |
| Growth Fund | 5% Bloomberg NZ Bank Bill Index, 15% Bloomberg Barclays Global Aggregate Total Return Index Unhedged (gross of interest and tax, 100% hedged to NZD) & 80% Morningstar Developed Markets Net Return Index (net of tax and dividends; 50% hedged to NZD). | Morningstar® Target Allocation IndexTM: Growth Multisector for New Zealand | Morningstar® New Zealand Growth Target Allocation Plus Net Return NZD |
| High Growth Fund | Not applicable | Morningstar® Target Allocation IndexTM: Aggressive Multisector for New Zealand | Morningstar® New Zealand Aggressive Target Allocation Plus Net Return NZD |
| Pathfinder Investment Funds | Benchmark performance before 1 Oct 2021 | Benchmark performance between 1 Oct 2021 to 30 April 2026 | Benchmark performance from 1 May 2026 |
|---|---|---|---|
| Ethical Growth Fund | 5% Bloomberg NZ Bank Bill Index, 15% Bloomberg Barclays Global Aggregate Total Return Index Unhedged (gross of interest and tax, 100% hedged to NZD) & 80% Morningstar Developed Markets Net Return Index (net of tax and dividends; 50% hedged to NZD). | Morningstar® Target Allocation IndexTM: Growth Multisector for New Zealand | Morningstar® New Zealand Growth Target Allocation Plus Net Return NZD |
| Global Water Fund | NASDAQ OMX Global Water Net Return Index (50% hedged to NZD) | No change | Solactive GBS Developed Markets Water All Cap (net total return basis; that is, including dividends and net of withholding tax, 50% hedged to NZD) |
| Global Responsibility Fund | Morningstar® Developed Markets Net Return Index (50% hedged to NZD) | No change | Solactive GBS Developed Market Investable Universe Index ex Australia Large & Mid Cap (net total return basis; that is, including dividends and net of withholding tax, 50% hedged to NZD) |
Rationale behind the changes
2026 changes to these benchmarks:
For our Pathfinder KiwiSaver Plan Funds and the Pathfinder Ethical Growth Fund, the new benchmarks are only different to our earlier benchmarks in the way they deal with foreign currency risk and changes. The new benchmarks are a better reflection of the foreign currency investment strategy of the underlying funds that these funds invest in [2]. Given this, the indices will allow a better comparison tool for these funds, especially in the short term.
For the Global Responsibility Fund and the Global Water Fund, the new benchmarks represent a slightly different range of companies compared to the old benchmarks, as summarised in the table below. The change in each case provides closer alignment with the way that these two funds invest. Note that, for each Fund, the new benchmark has a historical return correlation of over 90% with the respective previous benchmark.
| Fund | Benchmark performance from 30 April 2026 | Key changes at company level compared to previous benchmark (see table above [3]) |
|---|---|---|
| Global Water Fund | Solactive GBS Developed Markets Water All Cap (net total return basis; that is, including dividends and net of withholding tax, 50% hedged to NZD) | The new index covers a wider group of ~85 companies, including more water utilities, and focuses only on developed markets. The previous index covered ~40 companies, and included companies listed in emerging markets. |
| Global Responsibility Fund | Solactive GBS Developed Market Investable Universe Index ex Australia Large & Mid Cap (net total return basis; that is, including dividends and net of withholding tax, 50% hedged to NZD) | The new index excludes small-cap companies, defined as the smallest 15% (by value) of global developed markets. It covers ~1,400 companies, compared to ~4,000 in the previous index. |
In addition, for the Global Water and Global Responsibility Funds, the new index provider, Solactive, provides data to us that supports the day-to-day management of these funds. This includes a more accurate comparison and calculation for foreign exchange risk and returns in these funds. This is because Solactive calculates the NZ dollar currency hedged return (using the same 50% hedge ratio that these two funds use as a neutral target) of these benchmarks. This is discussed further here, where we provide an overview of how we calculate ‘hedged’ returns for our benchmarks, and how we have changed this methodology over time.
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[1] Note that our Funds have various inception dates, in cases during this period.
[2] Specifically, the new indices apply a 50% hedge ratio to global equities (compared to 0% in the previous indices for offshore equities). This is in line with our 50% hedge ratio that our Pathfinder KiwiSaver Plan Funds use as a neutral target for global equities. ‘Hedge ratios’ are explained further below.
[3] Data as at February 2026.
