Comparing Westpac KiwiSaver Scheme Funds

KiwiSaver is an investment, not a bank account

When you contribute money into your Westpac KiwiSaver Scheme investment account, it isn’t held as a cash balance like a bank account. Instead, it buys ‘units’ within one or more funds within the Westpac KiwiSaver Scheme. These units can increase or decrease in value based on market movements.

Check you're in the right fund

The extent to which your units change in value depends on what fund you are invested in. There are 6 different funds within the Westpac KiwiSaver Scheme, each offering a different level of risk and potential returns. The higher the growth potential of each fund, the higher the risk that it could lose value during market downturns – bearing in mind that markets generally recover over time. See investing essentials to help you make the right decisions for investing in the Westpac KiwiSaver Scheme.

Choosing the ‘right fund’ for you depends on:

  • Your investment goals: Are you planning to use your funds to buy a first home, or for retirement?
  • Timeframes: When do you expect to access your funds?
  • Investment risk: How comfortable you are with your investment potentially losing value, or having lower than expected returns?

I’m planning to buy a house or will otherwise be applying to withdraw all my investment in:

Recommended Minimum Investment Timeframe Westpac KiwiSaver Scheme Fund Investment Objective and Overview
None Cash Fund Aims to provide stable returns over the short term
Invests in income assets of a short term nature such as bank deposits, floating rate notes and money market securities
Volatility is expected to be the lowest of the funds
Long-term returns are likely to be lower than for investments that include growth assets
Click here to find out more about the Cash Fund
3 years Default Fund Aims to provide stable returns over the short to medium term
Invests primarily in income assets but is required to have an allocation to growth assets of between 15% and 25%
Volatility is expected to be higher than the Cash Fund but lower than the Conservative Fund
Returns will vary and may be low or negative at times
Click here to find out more about the Default Fund
3 years Conservative Fund Aims to provide stable returns over the short to medium term
Invests primarily in income assets but also has an allocation to growth assets
Volatility is expected to be higher than the Default Fund but lower than the Moderate Fund
Returns will vary and may be low or negative at times
Click here to find out more about the Conservative Fund
5 years Moderate Fund Aims to provide moderate returns over the medium term
Has a higher allocation to income assets than to growth assets
Volatility is expected to be higher than the Conservative Fund but lower than the Balanced Fund Returns will vary and may be low or negative at times
Click here to find out more about the Moderate Fund
7 years Balanced Fund Aims to provide medium returns over the medium to long term
Has a higher allocation to growth assets than to income assets
Volatility is expected to be higher than the Moderate Fund but lower than the Growth Fund
Returns will vary and may be low or negative at times
Click here to find out more about the Balanced Fund
10 years Growth Fund Aims to provide higher returns over the long term Invests primarily in growth assets but also has an allocation to income assets
Volatility is expected to be the highest of the funds Returns will vary and may be low or negative at times
Click here to find out more about the Growth Fund

 

Now you know each fund’s recommended minimum investment timeframe – when should you switch?

In short, generally you should be switching funds when changes in your life mean your savings goal or investment timeframe has changed.

You may need to consider switching if you plan to withdraw all your investment for circumstances which can include buying a home, you are at the Qualifying Age* or over and getting close to wanting to withdraw all your funds for retirement, are permanently moving overseas, suffering significant financial hardship or have been diagnosed with a serious illness.

Unless you’re a short-term investor as described above (that is, needing to access your money within the next few years), there are a couple of reasons why switching to a lower-risk fund during a downturn might not be such a good idea:

  • Because your account balance is made up of units within a fund, switching in effect sells these units at a lower value than the units previously had. You risk turning a ‘paper’ loss into a real one.

  • If you switch from a higher-risk fund to a lower-risk fund, this may reduce the benefit you receive on any market recovery that may follow.

Accessing Westpac KiwiSaver Scheme savings for retirement

When you reach the Qualifying Age, you can access your Westpac KiwiSaver Scheme account. You can if you prefer, leave your funds invested in the Westpac KiwiSaver Scheme and continue contributing until you need to access your savings (though you will no longer be eligible for the government contributions or compulsory employer contributions from Qualifying Age).

Then, when the time is right for you, you can withdraw all of your savings, or you can make regular or lump sum withdrawals. Find out more about your retirement withdrawal options here.

We're here to help

If you’d like personalised advice based on your current circumstances, feel free to get in touch with the Westpac Wealth Office via email or by calling 0800 942 822.