When you join KiwiSaver, your money is invested in a fund: one you choose or, if you don’t choose, your provider’s default. KiwiSaver funds are usually grouped into six types: cash, conservative, moderate, balanced, growth and aggressive. Each holds a different mix of investments, so each carries a different level of short-term risk and a different long-run return potential.
This guide explains what each type invests in and how the types differ. For how those differences play out depending on how many years you have until you need the money, see conservative vs balanced vs growth by time horizon. For the basics of the scheme, see what is KiwiSaver.
The Two Building Blocks: Growth vs Defensive Assets
All KiwiSaver funds hold a mix of two broad categories of investment.
Growth assets have higher potential returns over the long term but can fall significantly in value in the short term:
- Shares (equities): ownership stakes in companies listed on stock exchanges in New Zealand and overseas
- Listed property and infrastructure: for example real estate investment trusts
Defensive (income) assets are more stable in value but produce lower long-term returns:
- Bonds (fixed interest): loans to governments and companies that pay interest
- Cash and cash equivalents: bank deposits, term deposits, treasury bills
The fund type’s name reflects how heavily it tilts toward growth or defensive assets:
| Fund type | Growth assets | Defensive assets | Risk level |
|---|---|---|---|
| Cash | ~0% | ~100% | Very low |
| Conservative | ~10–25% | ~75–90% | Low |
| Moderate | ~35–55% | ~45–65% | Low-medium |
| Balanced | ~50–65% | ~35–50% | Medium |
| Growth | ~70–85% | ~15–30% | Medium-high |
| Aggressive | ~85–100% | ~0–15% | High |
Typical ranges; exact splits vary by provider. The product disclosure statement (PDS) and fund updates for any fund show its target and actual mix.
Fund names aren’t standardised in New Zealand. One provider’s “balanced” fund can hold more shares than another’s “growth” fund, and some providers use other names entirely (“defensive”, “income”, “conservative balanced”, “high growth”). Comparing the growth-asset percentage in the PDS is more reliable than comparing labels.
Cash Fund
A cash fund holds almost entirely cash and very short-term fixed interest: bank deposits, treasury bills and similar. There are essentially no shares, so its balance is unlikely to fall much in any year. Its returns tend to follow short-term interest rates such as the Official Cash Rate, which means they can fall when interest rates fall and may not keep well ahead of inflation over long periods. The conservative fund guide covers how cash funds compare with defensive and conservative funds.
Conservative Fund
A conservative fund holds mostly bonds and cash, with a smaller share allocation. It can still lose value in a bad year, particularly when bond prices fall as interest rates rise, but its falls tend to be smaller than those of higher-growth funds. Its main long-run risk is that returns may not keep far enough ahead of inflation. More in the KiwiSaver conservative fund guide.
Moderate Fund
A moderate fund (some providers say “conservative balanced” or “moderate balanced”) sits between conservative and balanced, with roughly a third to a half in growth assets. It is not offered by every provider. More in the KiwiSaver moderate fund guide.
Balanced Fund
A balanced fund holds a mix of growth and defensive assets, with no fixed split: Generate’s Balanced Fund, for example, targets 60% growth assets and SuperLife’s Default Fund 55%. It has more short-term ups and downs than conservative or moderate funds and fewer than growth funds. Balanced is also the fund type the government-appointed default providers must use for their default funds. More in the KiwiSaver balanced fund guide.
Growth Fund
A growth fund holds most of its money in shares from New Zealand, Australia and overseas markets, with a smaller allocation to bonds and cash. It has fallen further than balanced funds in past downturns and has historically produced higher long-run returns. More in the KiwiSaver growth fund guide.
Aggressive Fund
An aggressive (high growth) fund is almost entirely shares, with little or no bonds or cash to cushion a fall. Not every provider offers one, and the gap between a provider’s “growth” and “aggressive” funds can be as little as 10 to 15 percentage points of shares. More in the KiwiSaver aggressive fund guide.
Lifecycle Options
Some schemes offer a lifecycle (age-based) option that moves your money between their funds as you age, from higher growth toward lower risk, on a fixed schedule. Lifecycle KiwiSaver funds explains how they work and which schemes offer them.
How Fund Types Affect Fees
Fees vary more by provider and management style than by fund type. Actively managed growth and aggressive funds often charge more than conservative funds, but index-tracking providers charge low fees across every risk level. On a $100,000 balance, a 0.5% fee costs $500 a year and a 1.2% fee costs $1,200 a year. The KiwiSaver fee comparison by fund type lists providers’ current fees.
Passive vs Active Within Each Fund Type
Within each fund type, a fund can be passive (it tracks a market index and charges lower fees) or active (managers choose investments to try to beat the market, usually for a higher fee). Passive vs active KiwiSaver funds covers the fee differences, the evidence on after-fee returns and which schemes offer index funds.
Ethical Funds Within Each Fund Type
Ethical or responsible-investment funds exist at every risk level: an ethical growth fund is still a growth fund, with the same kind of short-term ups and downs. What “ethical” means varies by provider; the ethical KiwiSaver funds guide covers screening approaches and greenwashing.
Default Funds
If you were enrolled automatically and didn’t choose a provider, IRD allocated you to one of the government-appointed default providers (or your employer’s chosen scheme, if it has one), and those providers’ default funds are balanced funds. The KiwiSaver default fund guide covers which providers are default providers and what changed in 2021.
Which Fund Type Are You In?
- Your provider’s app or website shows your fund on the account dashboard
- Your annual statement names the fund
- myIR shows which provider you are with; the provider can tell you the fund
Switching Fund Types
Your current provider can move you to a different fund type, usually online; the move isn’t taxed and there’s no lock-in period. A move to a new provider works differently: the new provider sets it up (about 2 weeks, according to IRD) and the old one may charge a fee for it (switching KiwiSaver provider). Changing your KiwiSaver fund type covers the steps, and the KiwiSaver contribution rates page covers the other main setting you control.
Frequently Asked Questions
What are the KiwiSaver fund types? From lowest to highest risk: cash, conservative, moderate, balanced, growth and aggressive. They differ in the share of growth assets. Labels aren’t standardised, so the PDS is the place to check a fund’s actual mix.
Is a growth fund better than a balanced fund? Neither is better in general. A growth fund holds more shares, so it has tended to fall further in downturns and to return more over long periods. How that trade-off matters depends on when the money will be needed; see risk by time horizon.
Can I hold multiple fund types at once? Some providers let you split your balance and contributions across funds, for example 70% growth and 30% conservative. Not all do.
What happens to my KiwiSaver fund type when I turn 65? Nothing changes automatically at 65, unless you are in a lifecycle option. You can stay in the same fund, switch, or withdraw some or all of your balance. See KiwiSaver at 65.
Are aggressive KiwiSaver funds safer than investing in shares directly? The underlying market risk is similar, because an aggressive fund invests in shares. A KiwiSaver fund is spread across many companies and countries, which reduces the risk from any single company.
What is a default KiwiSaver fund? The balanced fund of one of the government-appointed default providers, used for members who didn’t choose. See the default fund guide.
Do ethical KiwiSaver funds perform worse? Not necessarily. The evidence is mixed, and what ethical funds exclude varies by provider. See ethical KiwiSaver funds.
What to Read Next
- Conservative vs balanced vs growth by time horizon
- KiwiSaver fee comparison by fund type
- Changing your KiwiSaver fund type
- All KiwiSaver fund types
For advice on your own situation, the FMA’s guide to getting financial advice explains how to find a licensed adviser.