Craigs Investment Partners

That’s the possible difference a 2% better return could make to your KiwiSaver investment*. 2% sounds small but over time can turn in to hundreds of thousands of dollars.

Take Sarah and James. At 25, they both join KiwiSaver. Sarah selects an investment portfolio with a growth focus and James doesn’t pick one, so is placed in a default fund – which is conservative. At 65 when they retire, although Sarah’s portfolio has only performed on average 2% p.a. better, she could have $233,000 more in her savings.*

Sarahs 2020 graph


Here are three simple steps you can take to find out if you need to move. First, find out how much risk you can manage. Next, check your risk level lines up with your existing investments – if not, move your KiwiSaver investments into a portfolio that is the right fit for you.

Step 1: Understand your risk

Discovering the level of risk you can tolerate is the best way to find the right KiwiSaver investment for you.

Your risk level is guided by two key factors:

1. Your ability to take on risk which is determined by your age and how long you’re planning to invest for.

2. Your tolerance or attitude to risk which is how you feel about the possible rise and fall in the value of your KiwiSaver balance.

These characteristics are personal to you; they form your risk profile. An investment adviser can help you to understand the level of risk suitable for you.

Step 2: Make sure your portfolio suits you

James was placed in a default KiwiSaver fund, as he didn’t make a choice when he first got set up. This isn’t uncommon but is not always ideal, as the default fund is conservative and not suitable for everyone’s personal situation.

Conservative portfolios are generally for those with a short-term investing horizon – perhaps they’re retiring in a few years or pulling the money out for a first home.

If you’re going to be investing for the next 10 or more years, you’re considered a long-term investor. Long-term investors have time to sit through the inevitable market fluctuations that happen from time to time.

This is a general perspective and it won't be right for everybody. What mix of assets is best for a particular KiwiSaver member depends on their particular situation – their risk tolerance, the term of their investment and their investment objectives.

Step 3: If your KiwiSaver investments aren’t quite right, it’s easy to move

With Craigs Investment Partners, not only can you invest in your chosen fund, you can also create your own KiwiSaver portfolio. This can be designed for your personal situation and made up of a selection of shares and funds of your choice.

Take this portfolio below for example, this investor has chosen to invest in a growth fund as well as several companies in New Zealand, Australia and the US.

If you’d like help with this, you can speak with one of Craigs’ investment advisers.

sarahs 2020 example portfolio


This article was originally published in the January 2020 issue of Kia Ora magazine.