Choosing and switching funds

Choosing a fund to invest in can be daunting – but the good news is you don’t have to be an investment expert to choose the right fund for you. 

When it comes to investing your hard-earned money, it’s important to make the decision that’s right for you. Smart investing isn’t just about ‘what’ fund to invest in – it’s about asking yourself ‘why’, too. Whether you’re choosing a fund for the first time or reviewing your existing fund choice, we’re here to show you how.

Let’s break it down.

How to choose the right fund for you

Choosing the right fund to put your hard-earned KiwiSaver savings in can seem complicated - but it doesn’t have to be. Basically, it comes down to two questions:

  1. What are you investing for – your first home or retirement?
  2. When do you plan to withdraw your KiwiSaver savings?

Your investment goals and timeframe

The key thing to think about is why you’re investing, and when you’re likely to want access to your savings.

For example:

  • Let’s say you’re 30 years old and you’re saving for retirement. With at least 35 years until retirement, there’s plenty of time for your savings to grow and recover from the inevitable market movements along the way. A growth fund may be a good choice, because growth funds typically deliver higher returns over the long term – and you’re in it for the long haul. 
  • But maybe you’d like to buy a home in the near future. In this case, you’ll want to know exactly how much money you have available for your house deposit. A conservative fund may be a good choice. It has a lower level of risk so it’s less likely to fluctuate in value – which gives you more certainty about how much money you have, when you need it.
  • Or perhaps you’re just incredibly busy and want a fund that moves seamlessly with you as you move toward retirement. Some KiwiSaver schemes offer options that switch funds automatically for you. For example, our Lifetimes option moves your savings automatically as you get older, into the fund that’s considered appropriate for an average person of your age.

To switch or not to switch?

Once you’ve chosen a fund, it makes sense to keep an eye on it to make sure it’s still meeting your needs. Set time aside regularly to review your appetite for risk, your goals, and your investment timeframe. These may change as your situation changes. If you’re investing for your retirement, for example, what was appropriate for your 30 year old self (with a long time until retirement) might not make sense when you’re 60, with just a few more working years to go. 

If you’re thinking about switching funds, it’s important to understand why. Is it because of a change in your circumstances, or is it a reaction to market events (such as a market downturn)?

Switching in market downturns

When investment markets are down, your fund balance can go down too. When that happens, it can be tempting to try and ‘course correct’ by switching to a lower-risk fund (for example, from a growth or balanced fund to a conservative fund). At this point, take a step back and ask yourself ‘why’.

Remember, it’s normal for your balance to fluctuate. Shifting from a growth or balanced fund to a conservative fund may ‘lock in’ your losses, which can be an expensive mistake.

Higher risk funds can fall faster in market downturns, but they can recover faster too – and over the long term, history shows us that they generally recover those losses (and continue to grow). So by switching to a lower risk fund in a downturn, you could miss out when the market recovers. 

When your balance falls, it’s natural to want to take action. But if you’re investing for the long term and investment goals haven’t changed, doing nothing is often the best option.

Tailored investment advice

The future is bright when you feel confident about your investment choices. If you need help choosing the right investment option for you, talk to your financial adviser. If you don’t have a financial adviser, we can put you in touch with an ANZ Investment Adviser on 0800 736 034. See ANZ’s financial advice provider disclosure.

Important information

ANZ Investments is the issuer and manager of the OneAnswer KiwiSaver Scheme, OneAnswer Multi-Asset-Class Funds and OneAnswer Single-Asset-Class Funds. 

Important information is available under terms & conditions. Download the guide and product disclosure statement.

Past performance does not indicate future performance. The actual performance any given investor realises will depend on many things, is not guaranteed and may be negative as well as positive.

We recommend seeking financial advice about your situation and goals before getting a financial product. Please talk to ANZ by calling 0800 736 034, or for more information about ANZ’s financial advice service or to view ANZ’s financial advice provider disclosure statement see