Not sure which fund you’re in or whether it’s the right fit?
KiwiSaver funds range from low-risk, steady options to high-growth, higher-risk choices. The right one for you depends on:
- How long until you need/will withdraw the money
- Your comfort with market volatility (the ups and downs)
- What kind of returns you’re aiming for
- And what your individual goals are.
Let’s break down the main types of KiwiSaver funds to help you understand the options available. Please note this can be variances across Providers but generally speaking this is the most common approach:
1. Cash Fund
A very conservative fund that invests in cash or cash-like assets. It’s designed to keep your balance steady — with very little risk, but also very little growth.
- Objective: Preserve capital and provide stable returns
- Risk Level: 1 (Very low risk).
- Best for: People planning to withdraw soon (e.g. first home or near retirement or those wanting maximum stability.
- Pros: Very low risk, no volatility, and offers reliable short-term returns.
- Cons: Low growth and may not keep up with inflation.
2. Conservative Fund
Invests mostly in bonds with a small amount of shares. Still low risk, but may have some short-term fluctuations.
- Objective: Provide modest returns and protect capital
- Risk Level: 2 (Low risk)
- Best for: Short-to-medium term investors (2-5 years) or those seeking some growth, with low volatility.
- Pros: More growth than the Cash Fund, and still relatively safe
- Cons: Can have small dips in value, however may not suit long-term growth goals.
3. Moderate Fund
Normally has a mix of bonds and equities, with more growth focus than conservative funds but still relatively steady.
- Objective: Provide moderate returns and capital growth
- Risk Level: 3 (Low to medium risk)
- Best for: Medium-term investors or those wanting balanced growth without big risks
- Pros: More growth potential and still offers some stability
- Cons: Can fluctuate with the market, and may not grow as fast as higher-risk funds.
4. Balanced Fund
Roughly half equities (shares), half bonds. A true middle ground fund for those willing to ride a bit of market movement for better long-term returns.
- Objective: Capital growth over a longer time
- Risk Level: 4 (Medium risk)
- Minimum investment timeframe: 5+ years
- Best for: Long term investors (5+ years and people okay with some ups and downs for better growth
- Pros: Well diversified and offers stronger long-term growth
- Cons: Moderate risk of short-term losses
5. Growth Fund
Heavily weighted towards equities, with some fixed interest to soften the blow of market dips. Designed for long-term growth, with a lot of providers offering active management seeking strong returns.
- Objective: Most specialist providers will try aim for 10%+ returns annually over time
- Risk Level: 4 (Medium-high risk)
- Minimum investment timeframe: 7+ years
- Best for: Long-term investors and those wanting higher growth and willing to take more risk
- Pros: Higher potential returns and active management strategy
- Cons: More volatility
6. Aggressive Fund
Primarily invests in international and Australasian equities. High-risk, high-reward. Your balance will rise and fall with the market — but over time, it has strong growth potential.
- Objective: Maximise capital growth.
- Risk Level: 5 (High risk)
- Best for: Long-term investors (7+ years) or younger savers that won’t touch KiwiSaver for decades
- Pros: Best long-term growth potential and Ideal for maximising retirement savings
- Cons: Higher risk of short-term losses and not ideal if you are approaching withdrawal.
When choosing a KiwiSaver fund, it’s important to match it with your goals, timeframe, and tolerance for risk. Not sure which fund you’re in or whether it’s the right fit? We’re here to help. Let’s review your KiwiSaver together and make sure your savings are set up to go the distance , whatever your goals may be.