A KiwiSaver moderate fund sits between conservative and balanced on the risk spectrum: more growth assets than a conservative fund, fewer than a balanced one. Not all providers offer a fund by this name; some call it “moderate balanced”, “conservative balanced” or “low growth”. Here’s what it invests in and how it behaves.
What Is a Moderate Fund?
A moderate fund typically holds a slightly larger allocation to income assets (bonds, cash) than a standard balanced fund, while still maintaining meaningful exposure to growth assets (shares).
Typical moderate fund asset allocation:
| Asset class | Approximate allocation |
|---|---|
| Cash and fixed interest | 40–55% |
| NZ and international shares | 30–45% |
| Property/infrastructure | 5–10% |
This compares to a balanced fund, which usually holds more growth assets: a moderate fund is nudged toward the conservative end of the balanced category.
Why the Naming Is Confusing
Fund naming conventions in NZ KiwiSaver are not standardised. What one provider calls “moderate,” another may call “conservative-balanced” or “moderate growth.” What matters is the actual asset allocation, not the label.
Before choosing any fund, check the fund’s Product Disclosure Statement (PDS) or fund factsheet for the actual percentage split between growth and income assets. Don’t rely solely on the name.
Returns and Volatility
A moderate fund’s return comes from two sources in roughly similar measure: interest from its bonds and cash, and growth and dividends from its shares and property. That mix shapes how it behaves:
- In a share market fall, it falls further than a conservative fund, because it holds more shares, but less than a balanced or growth fund (what a market downturn does to KiwiSaver).
- When interest rates rise sharply, its bond holdings lose value, as in any fund with a large fixed-interest allocation.
- Over long periods, moderate funds have historically returned roughly 4–6% a year before fees and tax, between conservative and balanced. Past returns do not guarantee future performance.
Because the gap between a moderate fund and its neighbours is small, the fee can make a noticeable difference to which way the comparison goes after costs. The KiwiSaver fee comparison by fund type lists providers’ current fees.
Availability
Not every provider offers a distinct moderate tier. Providers without one usually have conservative, balanced and growth funds only, in which case the balanced fund is the nearest alternative. Where a provider allows a balance to be split between two funds, a split can produce a similar mix. For how the moderate fund’s growth-asset range compares with the other types, see KiwiSaver fund types explained; for how the trade-off changes with the years until you need the money, see risk by time horizon.
Switching to a Moderate Fund
Members ask their existing provider to put them in a moderate fund, usually online, and that switch doesn’t create tax to pay. If your provider has no moderate tier, a fund with a similar growth-asset share may be called something else. Changing KiwiSaver fund has the full process.