A KiwiSaver growth fund invests predominantly in shares and property — assets that carry more short-term volatility but significantly higher long-run returns. For most working-age New Zealanders, a growth fund is the most appropriate KiwiSaver choice. Here’s what you need to know.
What Is a Growth Fund?
A growth fund holds the majority of its assets in growth assets — predominantly shares listed on NZ and international stock exchanges, as well as listed property and infrastructure. Income assets (bonds, cash) make up a smaller portion.
Typical growth fund asset allocation:
| Asset class | Approximate allocation |
|---|---|
| International shares | 40–60% |
| NZ shares | 10–20% |
| Listed property/infrastructure | 5–10% |
| NZ and international bonds | 15–25% |
| Cash | 2–5% |
The exact allocation varies by provider. Some providers offer both a “growth” and an “aggressive” or “high growth” fund; growth typically means 70–85% in growth assets, while aggressive is 85–100%.
Expected Returns
Growth funds have the best long-run return potential among mainstream KiwiSaver fund types — at the cost of short-term volatility.
Approximate long-run returns (before fees and tax):
| Fund type | Historical long-run average (approx.) |
|---|---|
| Conservative | 3–5% p.a. |
| Balanced | 5–7% p.a. |
| Growth | 7–9% p.a. |
| Aggressive | 8–10%+ p.a. |
Past returns do not guarantee future performance.
In a strong year, a growth fund might return 15–25%. In a poor year (2022, COVID 2020), it might fall 10–25%. Over a 10+ year period, however, diversified growth funds have consistently outperformed conservative and balanced funds.
Who Should Be in a Growth Fund?
Growth funds are most appropriate for:
- Members under 50 with 15+ years until KiwiSaver withdrawal — the time horizon is long enough to absorb downturns and recover
- Members in their 20s, 30s, and 40s — the overwhelming consensus in KiwiSaver research is that this age group should be in a growth or aggressive fund
- Members who understand volatility — year-to-year fluctuations are normal; growth fund investors should be able to tolerate seeing their balance drop in a bad year without panic-switching
Growth Fund in Your 50s
Members in their early-to-mid 50s (10+ years from 65) are generally still well-served by a growth fund. The question of when to start reducing risk is age-dependent:
- 50–55: Most fund-of-funds advisers suggest staying in growth
- 55–60: Consider shifting gradually to balanced
- 60–65: Begin shifting to balanced or conservative, depending on other assets and income sources
See conservative vs balanced vs growth by age for a more detailed breakdown.
Growth Fund Fees — Provider Comparison
| Provider | Growth fund | Approx. annual fee |
|---|---|---|
| Simplicity | Growth | 0.31% + $30/yr |
| Kernel | Global 100 | ~0.25% + $60/yr flat |
| InvestNow Foundation Series | Growth | ~0.40% |
| BNZ | Growth | ~0.50% |
| ANZ | Growth | ~1.06% |
| Westpac | Growth | ~0.60% |
| ASB | Growth | ~0.65% |
| Milford | Active Growth | ~1.05% |
| Fisher Funds | Growth | ~1.30% |
| Generate | Growth | ~1.05% |
Fees change; verify with provider before switching.
The fee gap matters enormously over time. At $100,000 balance:
- 0.31% fee = $310/year
- 1.06% fee = $1,060/year
- Difference: $750/year — compounding for 20 years is significant
Active vs Passive Growth Funds
Most major NZ bank KiwiSaver growth funds are actively managed — a team of investment managers selects stocks and bonds, aiming to outperform the market. They charge higher fees for this.
Passive (index) growth funds simply track a market index (e.g., the S&P 500 or MSCI World). They charge lower fees and, historically, tend to match or outperform most actively managed funds over long periods.
Providers with predominantly passive growth funds include Simplicity, Kernel, and InvestNow. See passive index KiwiSaver funds explained for a full comparison.
The Cost of Not Being in a Growth Fund
One of the most significant financial decisions NZ KiwiSaver members make — often without realising it — is staying in a conservative or balanced fund when they should be in a growth fund.
Illustrative comparison — $10,000 starting balance, $300/month contributions, 30 years:
| Fund type | Assumed return | Projected final balance |
|---|---|---|
| Conservative | 4% p.a. | ~$228,000 |
| Balanced | 6% p.a. | ~$311,000 |
| Growth | 8% p.a. | ~$436,000 |
| Difference (conservative vs growth) | ~$208,000 |
Projections are illustrative. Fees, tax, employer contributions not included. Real-world results will differ.
A young member who passively stays in a conservative default fund rather than switching to growth may retire with $150,000–$200,000 less.
Don’t Panic-Switch During Downturns
The biggest risk for growth fund investors is switching to a conservative fund after a market fall — locking in paper losses and missing the recovery.
- COVID crash (March 2020): growth funds fell ~20–25%; recovered within 12 months
- 2022 global market fall: growth funds fell ~10–18%; recovered within 18–24 months
Members who switched to conservative at the bottom of either downturn locked in those losses and missed significant recovery gains. This is why emotional discipline is as important as fund selection.
How to Switch to a Growth Fund
- Log in to your KiwiSaver provider’s app or website
- Navigate to investment options / fund selection
- Select “growth” (or the equivalent)
- Confirm — processed within 2–5 business days
Switching is free, and no tax event is triggered. If your current provider’s growth fund has high fees, consider switching provider at the same time.
Full guide: how to change your KiwiSaver fund type.
Summary
| Feature | Growth fund |
|---|---|
| Risk level | Medium-high |
| Typical return (long-run) | 7–9% p.a. |
| Asset mix | 70–85% growth assets |
| Best suited to | Under 55 with 10+ years to retirement |
| Poor fit for | Near-retirees (3–5 years from withdrawal) |
| Typical NZ fee range | 0.25%–1.30% |