Fund-vs-fund · Diversified
Mercer Income Generator Fund vs NZ Funds Wealth Builder - Inflation Strategy
Both are Diversified funds available to NZ retail investors. Numbers below are sourced from the FMA Disclose register via Sorted Smart Investor and reflect the latest published quarterly fund updates.
Why these two differ
The most material structural difference between these two funds is their growth asset allocation, which drives meaningfully different risk profiles despite both sitting in the Diversified category. The NZ Funds Wealth Builder – Inflation Strategy holds 78.48% in growth assets and carries a risk indicator of 5, while the Mercer Income Generator Fund holds 53.15% in growth assets and sits at a lower risk indicator of 4. Investors should not treat "Diversified" as a like-for-like label across these two funds.
On fees, the NZ Funds offering charges 1.58% per annum versus Mercer's 1.28% — a 30-basis-point difference that compounds over time. Over the five years to the latest QFU snapshot, Mercer returned 2.47% per annum against NZ Funds' 2.20% per annum, though short historical windows are a limited basis for comparison, particularly across funds with different risk exposures.
Portfolio construction also differs. Mercer's top holdings are concentrated in NZ-listed equities and fixed income instruments including Fisher & Paykel Healthcare (5.03%) and a New Zealand Government Bond. NZ Funds' disclosed top holdings skew toward NZ infrastructure and utilities — Telstra, Chorus, Contact Energy, Mercury NZ — alongside a 4.34% Westpac Cash position; the "Inflation Strategy" label suggests an explicit inflation-hedging mandate, though the PDS should be consulted for the formal investment objective language.
Fund sizes are broadly comparable: Mercer at NZD 20.7 million, NZ Funds at NZD 23.0 million.
Verify all figures against each fund's current PDS and latest Quarterly Fund Update on FMA Disclose before relying on this summary.
Comparison generated 2026-07-05 from each fund's FMA Disclose QFU facts as at that date. If the underlying facts change, this narrative is withheld until it is regenerated — the tables on this page always reflect the current data.
What's different at a glance
- Mercer Income Generator Fund charges 0.30% lower in annual fund charges (1.28% vs 1.58%).
- Both are New Zealand PIE funds — investor tax is capped at the Prescribed Investor Rate (PIR), maximum 28%.
Where each fund sits in its cohort
Percentile rank vs all 67 diversified funds we've matched on Sorted Smart Investor. Mechanical only — no opinion, no forward-looking view.
Annual fund charge
Lower is better
Mercer
1.28%
Highest 23% of cohort
NZ Funds
1.58%
Highest 5% of cohort
5-year return p.a.
Past performance — not a predictor
Mercer
2.47%
Lower half over 5 years
NZ Funds
2.27%
Lower half over 5 years
Fund size
Larger = more stable, lower close-risk
Mercer
NZ$21m
Lower half by size
NZ Funds
NZ$23m
Lower half by size
| Metric | Mercer | NZ Funds | Lower / higher is |
|---|---|---|---|
| Annual fund charge | 1.28% | 1.58% | Lower is better |
| Risk indicator (1–7) | 4 | 5 | Higher = more volatility |
| 5-year return p.a. | 2.47% | 2.27% | Higher is better (past not future) |
| Fund size | NZ$21m | NZ$23m | Larger = more stable, lower close-risk |
| Growth / income split | 53% / 47% | 78% / 22% | More growth = higher long-run return + volatility |
| NZ tax structure | PIE (PIR-capped) | PIE (PIR-capped) | PIE = simpler. FIF = annual return. |
| Currency hedging | — | — | Hedged smooths NZD/foreign FX moves at a small cost. |
| Responsible investment screening | No | No | Specific exclusions live in each fund's SIPO. |
| Available via | Direct | Direct | Platforms accepting retail subscriptions. |
Portfolio overlap
How many top-10 positions both funds hold, and at what weight. Computed from each fund's most recently disclosed top-10 holdings — exact-name matched (Microsoft Corp. = Microsoft Corporation), with a Cash / Cash & Equivalents collapse rule.
Matching holdings
2
of each fund's top 10
Mercer weight in shared
3.6%
of Mercer Income Generator Fund top 10 is shared
NZ Funds weight in shared
4.9%
of NZ Funds Wealth Builder - Inflation Strategy top 10 is shared
| Holding | Mercer | NZ Funds |
|---|---|---|
 Contact Energy Limited NZ | 2.01% | 2.52% |
 Meridian Energy Limited NZ | 1.64% | 2.41% |
"Min weight" = the smaller of the two weights — a conservative read of how much exposure you'd have to that position if you held both funds.
What each fund says it does
Mercer
Mercer Income Generator Fund
The fund aims to provide a gross fixed monthly income in excess of bank deposit rates, along with a positive return on capital over the long term. To achieve this, the fund invests in a diversified mix of growth and defensive assets, with a focus on reliable income generation. Environmental, Social and Governance characteristics are integrated into the underlying investment managers’ investment processes. The fund aims to maximise the amount of the monthly distribution payments to investors by outperforming, over the medium term, the weighted average return of tFull Mercer Mercer Income Generator Fund profile →
NZ Funds
NZ Funds Wealth Builder - Inflation Strategy
The objective of the NZ Funds Wealth Builder - Inflation Strategy is to mitigate the impact of inflation on your investment over the medium and/or long term. The fund is anticipated to mainly own and trade New Zealand, Australian and international shares over the minimum suggested timeframe.Full NZ Funds NZ Funds Wealth Builder - Inflation Strategy profile →
Documents
Crawled directly from each manager's website. How we record provenance →
NZ Funds
Common questions
What's the difference between the Mercer Income Generator Fund and the NZ Funds Wealth Builder - Inflation Strategy?
Which fund has lower fees, Mercer Income Generator Fund or NZ Funds Wealth Builder - Inflation Strategy?
How do the 5-year returns compare?
Are both funds PIE-taxed in NZ?
Where can I read the official documents for these funds?
