Around 80 per cent of JUNO members have chosen to invest in the JUNO Growth Fund. But why?

Members generally choose a growth fund because they have a long time – at least 10 years – before they need their money and can take on more risk. More risk means a higher return is more likely, but it’s also more likely the fund will go up and down over that time. Most important, members choosing a growth fund are comfortable they can handle the bumps and keep their eyes on the prize of the better chance of a higher return.

Members who don’t intend using their KiwiSaver money for a first home are saving for retirement. They can’t access the money until they turn 65, so for most members that’s a long way off.

If you fit this profile, you could be suited to a growth fund.

If you need your money sooner – perhaps because you’re putting it toward a first home, or you’re older and retirement isn’t as far away – a growth fund may not be suitable for you.

As a general guide, if you plan to take out your KiwiSaver money within roughly five to 10 years, a balanced fund might be better. And if you plan to take out your money in under five years, a conservative fund might suit you. That’s because it’s lower risk, designed to offer slower, steady growth, and helps keep your money safer.

You also might want to invest more conservatively if you’re not a confident investor. If your money’s invested in a growth fund, you’ll see it go up and down. Sometimes these dips can be often, and might be large drops.

Sometimes, these funds could take years to recover from a big dip. If these dips makes you feel worried or nervous you can either learn to get used to them and educate yourself about why the dips happen, or move your money to a lower-risk conservative fund, which will have less ups and downs, and they won’t be as large.

Conservative funds generally offer lower returns over the long term than higher-risk investments.

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Published 11 October 2019

Pie Funds Management Limited is the issuer of the JUNO KiwiSaver Scheme. You can read our Product Disclosure Statement hereThis article is general in nature only and has not taken into account any particular person’s objectives or circumstances. It does not constitute financial advice. We recommend you speak with an independent financial adviser.