The amount of money invested in KiwiSaver has topped $36 billion despite a turbulent end to the year for markets.
Morningstar figures show the retirement savings scheme grew by $5.9 billion last year to hit $36.7 billion even though the New Zealand share market fell 6.5 per cent in the last three months of 2016.
Chris Douglas, director of manager research ratings at Morningstar, said last year had produced two very distinct periods for investors with the first nine months seeing local markets perform strongly and then a switch to much more volatility.
"Volatility returned to markets in the final quarter of 2016, following the results from the US election.
"Fixed income markets, listed property, and New Zealand shares all produced negative results, while global equities was one of the few asset classes to shine."
Douglas said as a result more defensive KiwiSaver funds posted negative returns in the fourth quarter while growth funds were more positive.
Average returns ranged from -0.79 per cent for the conservative category to 2.54 per cent for the aggressive category.
But despite the tough end to the year all KiwiSaver funds managed to produce positive returns for 2016 across the multi-sector categories.
The aggressive KiwiSaver category had the highest average return over the year at 7 per cent while the conservative category averaged 6 per cent, balanced hit 5.9 per cent, moderate 5.1 per cent and conservative 4.7 per cent.
Douglas said it was most appropriate for investors to look at the longer term performance of KiwiSaver funds.
Over the last five years Aon Russell Lifepoints Conservative has topped the conservative category with an average annual return of 8.1 per cent while Milford's Balanced fund was top in the balanced category averaging 13.2 per cent.
ANZ's OneAnswer Growth fund topped the growth category on an average annual return of 13.1 per cent.
Milford's Active Growth fund was the top performer overall with an average annual return of 16.1 per cent.
Banks continue to be the dominant players in the market.
ANZ bank is the largest provider with $9.4 billion in investments and a 25.7 per cent share of the market.
While ASB bank and Westpac are second and third managing $6.7 billion (18.4 per cent) and $4.4 billion (12 per cent) of the market respectively.