When you join KiwiSaver, your money is invested in a fund chosen by you (or your provider, if you do not choose). There are six main fund types in New Zealand: cash, conservative, moderate, balanced, growth, and aggressive. Each one holds a different mix of investments, carries a different level of risk, and produces different long-term returns.
Choosing the right fund type is one of the most important — and most commonly misunderstood — decisions in KiwiSaver. Many New Zealanders are in a fund that does not match their goals, often because they never made an active choice at all.
This guide explains every KiwiSaver fund type in plain English: what each one invests in, what returns to expect, who it suits, and real NZ provider examples for each.
For help deciding which fund type is right for you specifically, see How to Choose a KiwiSaver Fund. For the complete KiwiSaver overview, see the KiwiSaver Complete Guide NZ.
The Two Building Blocks: Growth vs Defensive Assets
All KiwiSaver funds hold a mix of two broad categories of investment:
Growth assets are investments that have higher potential returns over the long term but can fall significantly in value in the short term. The main growth assets are:
- Shares (equities) — ownership stakes in companies listed on stock exchanges worldwide (NZX, ASX, NYSE, etc.)
- Listed property (REITs) — real estate investment trusts
Defensive assets are investments that are more stable in value but produce lower long-term returns. The main defensive assets are:
- Bonds (fixed interest) — loans made to governments and companies in exchange for regular interest payments
- Cash and cash equivalents — bank deposits, term deposits, treasury bills
The name of each fund type — conservative, balanced, growth — reflects how heavily it tilts toward growth versus defensive assets. A growth fund holds mostly shares. A conservative fund holds mostly bonds and cash. A balanced fund sits in the middle.
| 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 |
Allocations are typical ranges — exact splits vary by provider. Check the product disclosure statement (PDS) for any fund you are considering.
Cash KiwiSaver Fund
What it invests in
A cash fund holds almost entirely cash and very short-term fixed interest instruments — bank deposits, Treasury bills, and similar low-risk instruments. There are essentially no shares.
Risk and return
Cash funds carry the lowest risk of any KiwiSaver fund type. Your balance is unlikely to fall significantly in any given year. However, returns are also the lowest — typically in the range of 3–5% per year before fees and tax, often close to the prevailing OCR (Official Cash Rate) plus a small margin.
Critically, cash funds may not keep pace with inflation over the long term. If inflation runs at 3% and your cash fund returns 4%, your real (inflation-adjusted) return is just 1%.
Projected balance comparison (starting $10,000, $200/month contributions, 30 years)
| Fund type | Assumed return | Projected balance |
|---|---|---|
| Cash | 4.0% | ~$145,000 |
| Conservative | 5.0% | ~$167,000 |
| Balanced | 6.5% | ~$213,000 |
| Growth | 8.0% | ~$275,000 |
| Aggressive | 9.0% | ~$325,000 |
Illustrative only. Actual returns will vary. Does not account for fees or tax.
Who a cash fund suits
- Members within 1–2 years of a KiwiSaver withdrawal (retirement or first home)
- Members with an extremely low tolerance for any capital loss
NZ provider examples
Most large providers offer a cash fund or cash option. Examples include ANZ Cash Fund, ASB Cash Fund, and Simplicity’s Cash Fund.
Conservative KiwiSaver Fund
What it invests in
A conservative fund holds mostly defensive assets — typically 75–90% bonds and cash, with 10–25% in shares. The small share allocation provides some growth potential while keeping the overall volatility low.
Risk and return
Conservative funds can still lose value in a bad year — particularly if bond markets fall — but declines tend to be smaller and recover more quickly than growth-oriented funds. Expected long-term returns are typically 4–6% per year.
The most important thing to understand about conservative funds: they are not risk-free. They carry inflation risk — the risk that your returns do not outpace the rising cost of living over time. For a 25-year-old saving for 40 years, a conservative fund is often the wrong choice, even though it feels “safe.”
Who a conservative fund suits
- Members 3–5 years away from retirement
- First home buyers 2–4 years away from purchasing
- Members who have already built substantial savings and are focused on capital preservation
NZ provider examples
Simplicity Conservative Fund, ANZ Conservative Fund, Kernel Cash Plus (broadly conservative in nature).
Moderate KiwiSaver Fund
What it invests in
A moderate fund (sometimes called a “moderately conservative” fund) holds roughly 35–55% growth assets and 45–65% defensive assets. It sits between conservative and balanced.
Risk and return
Moderate funds carry more volatility than conservative funds but meaningfully less than balanced or growth. Expected long-term returns are typically 5–7% per year. In a significant market downturn, a moderate fund might fall 10–20%, compared to 30–40% for a growth fund.
Who a moderate fund suits
- Members 5–10 years from retirement or a first home purchase
- Members in their mid-to-late 50s who want to moderate risk without going fully conservative
- Members with a lower risk tolerance who still want some growth exposure
NZ provider examples
Simplicity Moderate Fund, ANZ Moderate Fund, ASB Moderate Fund.
Balanced KiwiSaver Fund
What it invests in
A balanced fund holds roughly 50–65% in growth assets (shares and property) and 35–50% in defensive assets (bonds and cash). It is the default fund type under the rules that came into effect in December 2021, meaning members who do not make an active fund choice are now assigned to a balanced fund.
Risk and return
Balanced funds are genuinely the middle ground — they will experience more volatility than conservative or moderate funds, particularly during sharp market downturns, but produce higher long-term returns. Expected long-term returns are typically 6–8% per year.
In the March 2020 COVID crash, most NZ balanced funds fell around 10–15% before recovering within months. A growth fund would have fallen further; a conservative fund would have barely moved.
Who a balanced fund suits
- Members with 10–15 years until withdrawal
- Members in their mid-40s to early 50s
- Members who want meaningful growth but are uncomfortable with the volatility of a growth fund
NZ provider examples
Simplicity Balanced Fund, Milford Balanced Fund, ANZ Balanced Fund, Booster Balanced Fund.
Growth KiwiSaver Fund
What it invests in
A growth fund holds 70–85% in growth assets — primarily listed shares from New Zealand, Australia, and international markets — with only 15–30% in bonds and cash. This is the most commonly recommended fund type for working-age New Zealanders with a long time horizon.
Risk and return
Growth funds are significantly more volatile than balanced funds. In a major market downturn, a growth fund might fall 25–40%. This is uncomfortable to experience, but for members with 15+ years until they need the money, the higher long-term return potential more than compensates for short-term volatility.
Expected long-term returns are typically 7–10% per year. The actual experience for any individual will depend on the specific years they contribute and withdraw.
The single most important lesson for KiwiSaver members in growth funds: do not panic-switch to a conservative fund during a market crash. Switching to conservative when markets are down locks in losses and means you miss the recovery. This is the most damaging mistake a long-term KiwiSaver saver can make.
Who a growth fund suits
- Members with 15+ years until retirement
- Most New Zealanders under 45 saving for retirement (unless buying a first home soon)
- Members who are comfortable seeing short-term balance fluctuations
NZ provider examples
Simplicity Growth Fund, Milford Active Growth Fund, Kernel NZ 20 Fund, ANZ Growth Fund, ASB Growth Fund, Booster Growth Fund, Generate Focused Growth Fund.
Aggressive KiwiSaver Fund
What it invests in
An aggressive fund holds 85–100% in growth assets — almost entirely shares, with minimal or no bonds. Some aggressive funds invest exclusively in global equities; others include a small allocation to NZ and Australian shares.
Risk and return
Aggressive funds carry the highest risk of any standard KiwiSaver fund type. In a severe market downturn, an aggressive fund could fall 35–50%. They also have the highest expected long-term returns — typically 8–12% per year — though actual returns vary significantly from year to year.
Not all KiwiSaver providers offer an aggressive fund. Where they do, the distinction between “growth” and “aggressive” can be subtle — sometimes just 10–15 percentage points more in equities.
Who an aggressive fund suits
- Members with 20+ years until retirement
- Younger members (under 35) with high risk tolerance and no plans to use KiwiSaver for a first home in the near term
- Members who understand and accept significant short-term volatility in exchange for higher long-term returns
NZ provider examples
Simplicity High Growth Fund, ANZ OneAnswer International Share Fund, Generate Focused Growth (which is effectively aggressive-leaning), Milford Aggressive Fund.
How Fund Types Affect Fees
Fund type and fees are closely connected. In general:
- Cash and conservative funds tend to have lower fees because the investments (bonds, cash deposits) are simpler to manage
- Growth and aggressive funds — particularly actively managed ones — often have higher fees because of the active stock selection involved
However, this is not universal. Low-fee passive providers like Simplicity and Kernel offer growth and aggressive funds with fees well below those of actively managed funds in the same category.
The impact of fees compounds over time. On a $100,000 balance:
- A 0.5% management fee costs $500/year
- A 1.2% management fee costs $1,200/year
Over 20 years, that $700/year difference — compounded — can amount to over $25,000.
See the KiwiSaver fees comparison for a full breakdown of NZ provider fees by fund type, and the best KiwiSaver providers comparison for performance data across fund types.
Ethical and ESG Funds: Applying Fund Types
Ethical KiwiSaver funds — which screen out companies involved in fossil fuels, weapons, tobacco, gambling, and similar activities — exist across all fund types. You can have an ethical growth fund or an ethical conservative fund.
The same time horizon principles apply to ethical funds. Choosing an ethical fund does not mean you need to accept lower returns — several NZ ethical funds have performed competitively against non-ethical peers.
NZ providers with notable ethical or ESG fund options include Pathfinder, Simplicity, Kernel, Booster Tahi, and some funds from Generate and Milford.
See the ethical KiwiSaver funds guide for a full comparison.
Passive vs Active Within Each Fund Type
Within each fund type, funds can also be passive (index-tracking) or actively managed:
Passive (index) funds track a market index — for example, the NZX 50, the S&P 500, or a global share index — automatically buying and holding all shares in the index. They do not try to pick winners. Because they require minimal active management, fees are lower.
Active funds employ fund managers who research and select individual stocks, trying to outperform the market. This costs more in management fees. Some NZ active managers — notably Milford — have strong long-term track records, though past performance is not guaranteed.
Research consistently shows that, over long periods, the majority of active funds underperform comparable passive funds after fees. For most KiwiSaver members — particularly those with smaller balances or longer time horizons — a low-fee passive growth or aggressive fund is a strong choice.
See Passive KiwiSaver Funds NZ for a full comparison.
Which Fund Type Are You Currently In?
Many KiwiSaver members do not know which fund type they are in. To find out:
- Log in to your provider’s app or website — your fund type should be displayed on the dashboard
- Check myIR — Inland Revenue’s online service shows your KiwiSaver provider and account details
- Call your provider — they can tell you your current fund type immediately
If you were auto-enrolled before December 2021 and never made an active choice, you may be in an older default fund — possibly conservative or cash. This is worth checking.
Switching Fund Types
Switching fund types is free with most NZ KiwiSaver providers and takes 2–5 business days to take effect:
- Same provider: log in to your provider’s portal or app and change your investment option
- Different provider: apply with your new provider — they manage the transfer, which typically takes 10–15 business days
There are no exit fees, no tax consequences from switching, and no lock-in period. You can switch as often as you like, though switching repeatedly trying to time markets is generally counterproductive.
See Changing Your KiwiSaver Fund Type for full step-by-step instructions. For background on how contributions flow into your chosen fund, see How KiwiSaver Works. Once you have the right fund type, reviewing your contribution rate is the next highest-leverage decision.
Frequently Asked Questions
What is the most popular KiwiSaver fund type in NZ?
Balanced funds have the largest share of KiwiSaver assets in New Zealand, partly because they became the default fund type in December 2021. However, growth funds have grown significantly as more members make active choices.
What fund type should a 30-year-old be in?
For most 30-year-olds saving for retirement, a growth or aggressive fund is appropriate — you have 35 years to recover from market downturns. If you are planning to use KiwiSaver to buy a first home in the next 3–5 years, a more conservative or moderate fund may be more suitable to protect your deposit. See KiwiSaver in Your 30s for detail.
Is a growth fund better than a balanced fund?
For members with a long time horizon (15+ years), yes — a growth fund is likely to produce a higher balance at retirement. For members closer to withdrawal, the greater volatility of a growth fund may be inappropriate. “Better” depends entirely on your time horizon and risk tolerance.
Can I hold multiple fund types at once?
Some KiwiSaver providers allow you to split your balance and contributions across multiple fund types — for example, 70% growth and 30% conservative. Not all providers offer this feature. Check with your provider.
What happens to my KiwiSaver fund type when I turn 65?
Nothing automatically changes at 65. You can continue in the same fund type, switch to something more conservative, or withdraw your balance. Many members begin shifting to conservative or cash in the years leading up to 65 to protect against a poorly timed market downturn.
Are aggressive KiwiSaver funds safer than investing in shares directly?
An aggressive KiwiSaver fund invests in shares, so the underlying market risk is similar. However, KiwiSaver funds are professionally managed, diversified across many companies and countries, and regulated by the FMA — providing more protection than directly buying individual shares.
What is a “default” KiwiSaver fund?
From December 2021, members who do not actively choose a provider or fund are allocated to one of the IRD-approved default providers, all of whom must place default members in a balanced fund. Previously, some default funds were conservative or cash — members enrolled before 2021 should check their current fund type.
Do ethical KiwiSaver funds perform worse?
Not necessarily. The evidence on ethical fund performance versus non-ethical funds is mixed, and some ethical funds have performed strongly. What ethical funds avoid — fossil fuel companies, weapons manufacturers — varies by provider. Review each provider’s specific screening approach before choosing. See Ethical KiwiSaver Funds NZ.
Summary: Which KiwiSaver Fund Type Is Right for You?
| Your situation | Recommended fund type |
|---|---|
| Retirement 20+ years away | Aggressive or Growth |
| Retirement 15–20 years away | Growth |
| Retirement 10–15 years away | Growth or Balanced |
| Retirement 5–10 years away | Balanced or Moderate |
| Retirement 3–5 years away | Moderate or Conservative |
| Retirement within 3 years | Conservative or Cash |
| First home purchase in 1–3 years | Conservative or Cash |
| First home purchase in 3–5 years | Conservative or Moderate |
The most important principle: time horizon drives the decision. The longer you have, the more volatility you can absorb — and the more your long-term returns will benefit from exposure to growth assets.
For a step-by-step framework to make this decision for your specific situation, see How to Choose a KiwiSaver Fund.
To compare providers within your chosen fund type, see the KiwiSaver provider reviews and fees comparison.
For personalised advice, speak with a licensed financial adviser — find one through the FMA’s financial adviser register.