Anyone else feeling jittery about their KiwiSaver? Should we switch fund types or ride it out?
With geopolitical events causing disruption and uncertainty – particularly the escalating Middle East war that is seeing oil prices surge – it’s easy to feel jittery about the chaotic state of the world. And to feel jittery about your finances.
I’ve been nervously looking at my KiwiSaver fund. It’s the only investing I do – well, someone does it for me. My provider is ASB Bank, simply because that’s where my personal bank accounts are. You choose your favoured KiwiSaver fund type: Aggressive, Growth, Balanced, Moderate, Conservative, or the very low-risk NZ Cash Fund.
I had ‘Conservative’ for a few years, then ‘Balanced’ for around 15 years, simply because I thought they sounded sensible. Then I read about how a Growth Fund is better if you’re several decades away from retirement, so I switched to Growth maybe two years ago. (Dang, how many investment gains did I miss out on?)
But now I’m thinking of changing it back from Growth to Balanced. Why? Oil prices are rising. Stockmarkets are being shooketh. For starters, take the NZX50, New Zealand main stockmarket index. Investment news and analysis site The Bottom Line reported that, on March 9, “the NZX50 sank 420.52 points, or 3.1%, to 13,098.83 in its biggest one-day decline since April 7 last year when the world was rocked by US President Donald Trump’s tariff regime”. On March 12, the NZX50 dropped a further 93.84 points.
So, with me feeling jittery, should I switch my KiwiSaver back to Balanced? Hell, am I worried enough to go Conservative?
The Anxiety Premium
Frances Cook – an award-winning financial journalist, educator, author and podcaster – has written on this topic in her excellent Substack ‘The Market Memo’.
“When we see headlines about petrol and energy prices soaring, or choked global trade routes pushing up the cost of living, or KiwiSaver and investing balances tanking, yes, it’s fair to worry if your safety net is still in place. The monkey brain takes over. It wants to do something. To panic-sell, cash out, or hide under the duvet until the news cycle calms down.”
Fear can overwhelm logic.
“One of the important things to understand about the sharemarket is that it doesn’t give you ‘free’ money. You aren’t just getting 7 to 10% a year because you’re a nice person. You’re being paid a premium for sitting through the uncertainty that others can’t stomach. Think of those 10% returns as your Anxiety Premium.”
“You’re literally being compensated for the fact that every few years, the world gets loud and scary, and you have to sit there and do… nothing.”
“History shows us that while these moments feel unique and terrifying, the market is remarkably resilient. And that’s not because the world is a perfect place, it’s because businesses are adaptive. If shipping routes get blocked, they find new ones. If energy costs spike, they innovate. As an investor, you’re backing that human ability to problem-solve.”
Panic stations?
Award-winning journalist Alexandra Hartman has just published an article called ‘Don’t Panic Sell: Why You Should Ride Out Market Volatility with KiwiSaver’.
“The world feels increasingly unsettled,” she writes. “From escalating conflict in the Middle East to ongoing global economic pressures, it’s understandable to feel anxious about the future – and about your financial security. While geopolitical events unfold overseas, New Zealanders are already seeing the effects at home, with rising petrol prices and increased cost of living. For many, this naturally leads to questions about the safety of their KiwiSaver investments.”
Yep.
“Navigating market volatility can be daunting,” she adds, “and the urge to react – to withdraw funds or drastically alter your investment strategy – is strong. However, financial experts suggest a measured approach is often the most effective. Understanding how markets respond to global events, and recognizing the long-term nature of KiwiSaver, can help investors avoid making rash decisions they may later regret.”
“The key, according to many financial advisors, is to resist the temptation to panic. The sharemarket, while susceptible to short-term fluctuations, historically demonstrates resilience. Understanding the ‘anxiety premium’ – the compensation investors receive for weathering periods of uncertainty – is crucial.”
Free financial advice
Diligent Wealth Management, a licensed financial-advice provider, offers KiwiSaver advice and tips. It can help you compare providers, fees, and investment options; and learn about eligibility criteria, fund selection, and government contributions. I asked Matt Porter, Financial Adviser and Client Relationship Manager at Diligent, if people should changes their KiwiSaver funds based on current geopolitical events.
“Global events can make investors nervous, but switching KiwiSaver fund settings purely because of short-term headlines isn’t always the best move,” he tells me. “What matters most is whether your fund still matches your timeframe, risk tolerance, and retirement goals, so it’s important to review your situation rather than react to market noise. Periods like this are often where financial advisers add the most value, helping investors stay focused on their long-term plan rather than making reactive decisions.”
So, I shouldn’t change my fund from Growth to Balanced?
Changing from a growth fund to a balanced fund purely because of short-term global events is not always the right approach,” Matt says. “Growth funds are generally designed for investors with longer time horizons and can experience short-term volatility along the way. Historically, markets have gone through many cycles, and reacting to short-term news or market movements can sometimes result in investors locking in losses or missing potential recoveries.”
Question time
I found the KiwiSaver Advice Questionnaire from Diligent Wealth Management. I filled it out, with my KiwiSaver balance, my percentage contribution rate, annual income, current age (45), will I withdraw for a home or retirement (the latter), the age I plan to retire (75, I’d be too bored otherwise), how much I want to spend weekly when retired, my current KiwiSaver provider, and what kind of fund I’m in.
Then I answered multi-choice questions; my responses are in bold.
Question: what would you do after reading the below news headlines?
“Imminent Stockmarket Crash: Could your KiwiSaver drop drastically in value?”
“Interest rates rise causing large market sell off”.
I would look to transfer my money to a more conservative KiwiSaver fund.
Do nothing. No one can accurately predict a market crash.
If the crash happens and I have some more money to invest, I’ll make a voluntary contribution into my KiwiSaver account.
I’ll talk to Diligent Wealth Management for their advice.
Question: How involved do you want to be in monitoring your KiwiSaver funds?
I like to check the value of my KiwiSaver account regularly through an app or online.
I like to see quarterly updates of my KiwiSaver fund value so I can stay updated.
I’ll just leave everything up to Diligent Wealth. You give me a review once a year.
Question: Which of the following best describes your level of investment knowledge?
Beginner: I am not familiar with investment concepts.
Knowledgeable: I am familiar with terms such as Diversification and Volatility.
Very Knowledgeable: I have a good understanding of terms such as Volatility, Asset Allocation and Dollar Cost Averaging.
Expert: I understand exactly how Volatility, Asset Allocation, Diversification and Dollar Cost Averaging will affect my KiwiSaver investment.
Question: from the following statements which one would you relate to the most?
I understand volatility and different investments and am very comfortable investing in growth assets.
Investing my money stresses me out. I would prefer keeping my money in the bank.
I think I’ll be OK if the value of my Kiwisaver account went down a little bit in the short term.
I prefer a slow and steady increase in my KiwiSaver balance.
It’s important for me not to stress. So I would prefer no risk in my KiwiSaver account.
Question: What is more important to you, returns or less ups and downs in your balance?
A Conservative fund (fewer ups and downs in KiwiSaver balance) even if it means lower returns.
I am OK with the greater ups and downs in KiwiSaver balance expected from a Growth Fund so I can get maximum returns.
I would prefer a Balanced approach between returns and ups and downs in my KiwiSaver balance.
I want the best returns and understand a higher level of risk is required.
Question: When choosing a KiwiSaver provider, what is most important to you?
Environment and Social concerns (ESG) are my top priority. I do not mind paying slightly higher fees and potentially having slightly lower returns.
Getting the best returns is my top priority. I do not mind paying slightly higher fees for the potential of getting higher returns.
Paying low fees is my top priority.
I would prefer investing with one of the well known providers.
I don’t have any particular preference. Just tell me what’s the best option for me.
Question: What other retirement assets will you have available apart from NZ Superannuation and KiwiSaver?
Rental property
Managed Funds or Shares
Downsize my home
Term Deposits
Overseas Pension
None, KiwiSaver and NZ Super is my only retirement funding
Sale of business or private equity
Inheritance
Advice, please!
Diligent’s Matt Porter prepared a Statement of Advice for me, outlining his KiwiSaver scheme recommendation and the reasoning behind it. First, Matt needs us to note that his recommendation for me is based on my questionnaire responses, my long-term investment timeframe, and available KiwiSaver options (rather than any particular provider). “So this recommendation may not be appropriate for everyone. Readers should also understand that these comments are general information rather than personalised financial advice, and that they should consider their own circumstances or speak with a licensed financial adviser before making KiwiSaver changes.”
That said, he recommends that I transfer my KiwiSaver from ASB to Booster’s KiwiSaver Geared Growth Fund. “You’ve completed our KiwiSaver questionnaire, which indicates you’re a Balanced investor; however given the fact that you are unable to access KiwiSaver except for limited circumstances until age 65, you have a very long investment timeframe so are in a position to take a higher risk on this investment in order to achieve your retirement goals.”
A highly regarded NZ financial-services company, Booster has 14 moderate, balanced, growth, and high-growth KiwiSaver funds, across the risk spectrum, each offering a different level of potential return and targeted to different life stages. It administers over $8 billion on behalf of 200,000-plus New Zealanders.
“Booster has delivered strong long-term performance relative to many comparable funds and relevant benchmarks,” Matt says. “This reflects its active management approach and disciplined investment process. While past performance does not guarantee future returns, consistent long-term performance can contribute positively to retirement outcomes through the compounding of returns over time. This diversified structure also provides flexibility by helping smooth short-term market fluctuations while maintaining exposure to growth assets appropriate for your long-term investment timeframe and retirement objectives.”
So I’ll likely switch. And I’ll swot up on the ‘introduction to investing’ information provided with the Statement of Advice. There’s no time like the present.
*The information Diligent Wealth supplies on their website is free, and you can have a discussion for free with no obligations. They generally don’t charge clients directly for KiwiSaver advice, but may receive an ongoing service fee from the KiwiSaver provider