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What Is The Best KiwiSaver Fund To Be In?

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What Is The Best KiwiSaver Fund To Be In?

Determining the “best” KiwiSaver fund is subjective and depends on your individual financial goals, risk tolerance, and investment timeframe. There are several types of KiwiSaver funds, each with its own level of risk and potential return. Here are the most common types of funds:

Conservative Funds: Lower risk, suitable for short-term goals or those who are risk-averse. Primarily invests in low-risk assets like cash and fixed interest.

Balanced Funds: A mix of growth and income assets, offering a balance between risk and return. Suitable for medium to long-term goals.

Growth Funds: Higher risk but with the potential for higher returns. Invests more heavily in growth assets such as shares. Suitable for long-term investors with a higher risk tolerance.

High Growth Funds: Highest risk and potential return. It invests predominantly in growth assets, which is suitable for long-term investors who are comfortable with market fluctuations.

Read More: Best Performing KiwiSaver Funds

To determine the best fund for you:

Consider Your Goals: It’s important to figure out what you want to achieve financially, like saving for retirement, purchasing a home, or paying for education. Your investment plan should be in line with your goals and the time you have to achieve them. Just remember, life can be unpredictable, so it’s a good idea to check in on your financial goals from time to time and make changes if necessary.

Assess Risk Tolerance: If you’re not comfortable with the ups and downs of the stock market, you might want to consider a conservative or balanced investment fund. These types of funds are less risky, but they also offer lower potential returns. If you’re willing to take on more risk for the possibility of higher returns, you might prefer a growth or aggressive fund. 

To help you figure out which type of fund is right for you based on your risk tolerance, many financial institutions offer questionnaires that ask about your preferences in managing risk. These assessments take into account factors such as your comfort level with market fluctuations, helping you make more informed decisions about the type of fund that aligns with your risk tolerance.

Review Performance: When you’re looking at how well an investment fund has done in the past, it’s helpful to compare its performance to other similar funds. This will give you an idea of how well it did compared to the overall market. You should try to find funds that have consistently done well in all different kinds of market conditions – whether the market was going up or down. It’s also a good idea to look for funds that have a manager with a good reputation for making smart investment decisions. That way, you can feel more confident that the fund will continue to do well in the future.

Fees and Charges: When choosing a KiwiSaver fund, it’s important to look at all the costs involved, not just the management fee. One way to do this is by checking the Total Expense Ratio (TER), which includes all the fees associated with the fund. Going for a fund with a lower TER can help you earn better returns in the long run. It’s also important to understand the fee structure of a fund, including any performance fees they may charge. Some funds charge extra fees based on how well they perform, which can affect your returns. So, it’s better to choose a fund with a clear and straightforward fee structure to avoid any hidden charges that might reduce your returns without you even knowing.

Read More: Comparing KiwiSaver Fees & Taxes

Professional Advice: Choosing the “right” fund can be confusing and overwhelming, but you don’t have to go it alone. Financial advisors can help you make sense of your finances and plan for the future. They look at your entire financial picture, not just your KiwiSaver account, and can help you with things like taxes, insurance, and planning your estate. It’s a good idea to meet with a financial advisor regularly to make sure your investment strategy is on track and to adjust it as your life changes. Plus, working with an advisor can help you learn more about how to manage your money and make informed decisions.

Remember that the “best” fund varies from person to person, and it’s crucial to regularly review your investment strategy as your circumstances change. KiwiSaver providers often offer tools and information to help you make an informed decision, and it’s advisable to stay informed about market conditions.

 

What's the reason not to get advice on you KiwiSaver account? Let National Capital help.

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