Balanced KiwiSaver Funds
When it comes to growing your KiwiSaver savings, balanced KiwiSaver funds offer a middle ground between risk and reward. These funds aim to provide a mix of growth and stability by combining both high and low risk assets.
What are Balanced KiwiSaver Funds?
KiwiSaver funds consist of a combination of Growth Assets and Income Assets. The split between growth and income assets is adjusted depending on your chosen risk profile.
Income Assets: These low risk assets usually include cash and bonds. They are designed to provide regular income to your fund through interest payments, offering stability and consistent returns.
Growth Assets: These higher risk assets encompass shares and property. They aim to deliver capital growth over time, with returns that can fluctuate due to market conditions.
Balanced funds are typically made up of around 55% growth assets and 45% income assets. This mix is designed to offer both growth and protection. By focusing more on growth assets, the fund has the potential for higher returns. At the same time, the income assets help keep the portfolio steady and provide regular earnings.
Who Should Consider Investing in Balanced Funds?
Medium-Term Investors: If you’re not too close to retirement but still want to manage risk, balanced funds can offer a sensible mix of growth and security.
Those Seeking Moderate Risk: If you’re comfortable with some level of risk but don’t want to go all-in on high-risk investments, balanced funds strike a good compromise.
Investors Who Want Diversification: If you’re looking for a diversified investment that offers both growth potential and risk management, balanced funds provide a well-rounded approach.
Things to Watch Out For
While balanced funds offer a mix of growth and stability, they come with their own set of considerations. They might not provide the high returns of aggressive funds or the complete safety of conservative ones. Additionally, the balance between growth and defensive assets can vary between funds, so it’s important to understand the specific allocation and how it aligns with your financial goals.
Determine Your Risk Tolerance
If you want to know whether a balanced fund would suit your investment profile and timeframe, our KiwiSaver experts can run through a quick questionnaire with you, and get you into the right fund – free of charge. Get started.
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