Worried KiwiSaver members are asking: is this time different?
By Susan Edmunds of RNZ.
Markets have been volatile this week as they digest the impact of the war in the Middle East.
But some investors have been concerned the warnings of economic disruption could mean more pain to come for their KiwiSaver balances.
One woman who wrote to RNZ said she was 64 and worrying about her KiwiSaver balance falling.
"I am out of work due to illness and have no other income or support from the government … I am really counting on this money. I'm worried not much will be left."
KiwiSaver managers say - as ever - the volatility is the price that investors pay for the returns they get on the other side, and for most people, sticking with their investment strategy is the best plan of action.
ASB chief investment officer Frank Jasper said the bank was fielding some inquiries.
"People obviously seeing headlines, especially [Monday] seeing some pretty dramatic market moves and asking questions around what's going on."
Jasper said, while riding it out was usually the best course of action, a downturn in markets could sometimes highlight a personality mismatch for investors.
"We do all of this risk profiling when we go into KiwiSaver and we get asked about our attitude to risk.
"And then we live through these experiences and they are visceral experiences, that really test your genuine attitude towards risk.
"I think for some people, it's a learning opportunity … And they realise 'when I actually experience it, I realise that it does affect me a bit more than I thought' ... every time there's a dramatic market move, despite the fact the long-term evidence suggests the world gets through it and we do recover, there's a scenario you can paint where things get worse.
"Sometimes people will lean heavily on that 'things will get worse' scenario. Sometimes they will be right, but most of the time the world returns to normal and things are okay."
He said, since 2009, the S&P500 had fallen more than 5% 32 times and continued to record all-time highs through that period. "It's just a feature of the market."
He said it typically took 47 days for the market to recover from a shock.
'And then within 12 months, about 68% of the time, the market is higher than it was 12 months ago."
He said persistently negative markets would usually come only when a shock becomes a macroeconomic crisis.
But Jasper said it was a good opportunity for people to think about whether their fund was a match for their emotional ability to cope with risk, not just their investment time horizon.
"It's very easy to think you are relaxed if there are drawdowns or relaxed if there are shocks in the markets. It's only living through these experiences you get to actually genuinely test what your attitude to risk is. For some people, they will experience this and go 'you know what? I don't sleep well at night and I'm genuinely uncomfortable about this'.
"For those people, it may be very rational to think about a different risk profile over time. But for others they'll go 'I've got 20 years left, I know these things happen. I'm okay with it'.
"If you think about any other thing in our life, if the big screen TV was on special we'd be really happy about it. Or if you could dine at your favourite restaurant bit cheaper than normal, you'd be really happy about it. The minute shares go on sale, they fall a bit, we get the chance to buy more shares in good companies that we can own for the next 20 years, we kind of get nervous about it. It's strange behaviour in the financial markets we don't see in any other parts of our lives."
ANZ, the country's biggest KiwiSaver provider, said it had been contacted by a small number of people who wanted to switch to a more conservative fund.
"In April 2025, during another recent period of market volatility, we also noticed an increase in customers contacting us to switch into more conservative funds. However, the numbers were again low - a couple of hundred - and a fraction of what we saw in March 2020.
"We think this is a reflection of how ANZ Investments, alongside other KiwiSaver providers and industry participants, have made conscious efforts to remind KiwiSaver members to stay the course."
At Milford, head of KiwiSaver Murray Harris said it had not received many calls or questions but was telling members that markets moved up and down and this was no different.
He said investors who stuck to their goals would do better than those who tried to time the markets and switch funds to avoid a downturn, because they would often turn out to have moved at the wrong time. That could mean locking in losses and missing out on the recovery.
Morningstar NZ spokesperson Greg Bunkall said the impact on funds would depend on the performance of equity markets from now.
"To date, the KiwiSaver balanced and growth indexes Morningstar uses to track KiwiSaver funds are flat, and that doesn't include the bounce back [Tuesday] morning."
So what can you do if you're worried?
You should be in a KiwiSaver fund that matches your risk profile.
If you have a long time until you need your money, you can afford to take some more risk and should get through this disruption - and others - by not paying too much attention to your KiwiSaver balance.
If you need the money soon, you should already be in a conservative fund that hopefully isn't moving around too much.
If you've realised you've got your settings wildly wrong, and you need money now, you'll probably need to move your investments, even if it means locking in losses.
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