Checked Your KiwiSaver Lately? Here's What's Been Happening

If you've checked your KiwiSaver balance over the past few weeks, you may have noticed some movement.

Investors have had plenty to keep an eye on recently, including escalating tensions involving Iran, fluctuations in oil prices, ongoing discussions around interest rates, and mixed economic data from around the world. Despite these uncertainties, global sharemarkets have remained surprisingly resilient, with many major indices continuing to trade near record highs.

While headlines can often make markets feel more uncertain than they are, recent events have been another reminder that short-term volatility is a normal part of investing.

Conservative Funds

For Conservative Fund investors, the past few weeks have generally been relatively stable.

Because these funds hold a larger allocation to cash and fixed interest investments, they tend to be less affected by sharemarket fluctuations. While they typically don't experience the same level of growth as more aggressive funds during strong markets, they also provide greater protection when markets become volatile.

Most Conservative Funds have likely delivered modest positive returns over this period, benefiting from stable bond and cash markets while avoiding much of the volatility experienced by sharemarkets.

Balanced Funds

Balanced Funds have continued to demonstrate the benefits of diversification.

While global events have created some uncertainty, gains in international sharemarkets have generally outweighed the short-term volatility. The defensive assets held within Balanced Funds, such as bonds and cash, have also helped smooth returns along the way.

As a result, many Balanced Funds have produced positive returns over the past few weeks, providing investors with a balance between growth and stability.

Growth Funds

Growth Funds have experienced the largest movements, which is expected given their higher exposure to global sharemarkets.

Earlier in the month, concerns surrounding Iran and rising oil prices caused some market volatility as investors worried about the potential impact on inflation and economic growth. However, as fears of a broader disruption eased, markets recovered strongly.

Major international sharemarkets have risen approximately 3-5% over the past month, helping support returns for many KiwiSaver Growth Funds. Technology and artificial intelligence-related companies have continued to be major contributors to market performance, particularly in the United States.

While Growth Funds can experience larger short-term ups and downs, investors with longer timeframes should remember that volatility is often the price paid for higher long-term return potential.

The Bottom Line

The past few weeks have shown that markets can remain resilient even when global headlines appear negative.

For KiwiSaver investors, the most important thing remains ensuring your fund choice matches your timeframe and tolerance for risk. If retirement is still many years away, short-term market movements are usually just part of the journey. If you're planning to access your KiwiSaver sooner, it may be worth reviewing whether your current fund remains appropriate.

As always, if you're unsure whether you're in the right KiwiSaver fund, feel free to get in touch.