KiwiSaver is not a bank account, it’s an investment. And like all investments, its value has the potential to go up and down depending on how markets move. KiwiSaver Specialist Antonio Lucero explains more on this below.
When you contribute to your KiwiSaver savings you buy units in a fund. These units represent your share of the fund, which invests in assets such as shares, bonds and commercial property. As the value of these assets fluctuate with market movements (both up and down), so does the value of your units and the balance of your KiwiSaver account.
Growth funds are invested in a higher proportion of growth assets (such as shares and property) and therefore have the potential for higher returns in the long term, however they will also have more ups and downs along the way. Conservative funds are invested in a higher proportion of income assets (like bonds) while that means they are likely to achieve lower returns over the long term than a growth fund, they tend to have less extreme ups and downs along the way.
It is important that you are in the right strategy, one that aligns to your goals and your comfort with risk. Need help choosing your investment strategy? Answer our Investor Profile Questionnaire now to find out which fund suits you, or contact us on 0508 FISHER (0508 347 437). If you already know which fund you would like to be in, joining online takes 2 minutes, join now.
For more answers to questions like this as well as insights from our investment team, visit our video library.
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How we invest
The bedrock of our investment process is a philosophy or set of beliefs that set out what we believe drives share prices, where best to look for investment opportunities and how we should organise ourselves to identify and profit from these opportunities.
Download 'Building Greater Lifetime Savings: An Introduction To How We Invest In The Share Market'