{"id":49147,"date":"2025-11-19T17:05:48","date_gmt":"2025-11-19T04:05:48","guid":{"rendered":"https:\/\/milfordasset.com\/?p=49147"},"modified":"2025-11-19T17:12:02","modified_gmt":"2025-11-19T04:12:02","slug":"finding-your-fund-understanding-balanced-kiwisaver-funds","status":"publish","type":"post","link":"https:\/\/milfordasset.com\/insights\/finding-your-fund-understanding-balanced-kiwisaver-funds","title":{"rendered":"Finding your fund: Understanding Balanced KiwiSaver Funds"},"content":{"rendered":"

When it comes to KiwiSaver and investing, you\u2019ve probably heard terms like conservative, balanced, and growth thrown around \u2013 but what do they actually mean?<\/p>\n

With more than 300 KiwiSaver funds\u00b9 to choose from , understanding the difference between them could have a big impact on your KiwiSaver balance at retirement. We\u2019ve created this three-part series breaking down the three main fund types \u2013 conservative, balanced, and growth \u2013 to explain the unique role each fund type could play in shaping your financial future.<\/p>\n

In part one, we looked at conservative funds<\/a>, which typically focus on stability and capital preservation \u2013 aiming to avoid losses by using low-risk investments. Now, in part two, we move up the risk scale to explore balanced funds \u2013 the middle ground between stability and growth.<\/p>\n

What you need to know about balanced funds<\/strong>
\nAs the name suggests, a balanced fund spreads investments across shares and fixed income to find a happy medium between risk and return. The idea is that shares offer the potential for growth while fixed income investments, such as bonds, provide more steady returns that can help balance out the ups and downs of the share market.<\/p>\n

A typical balanced fund invests:<\/p>\n

\u2022 40% to 50% in fixed income such as bonds, term deposits, and savings accounts
\n\u2022 50% to 60% in shares across a range of sectors and regions<\/p>\n

Balanced funds are popular because they combine diversification across assets, simplicity, and a mid-level risk profile (which means taking on some risk in pursuit of higher returns but mostly avoiding extreme market ups and downs).<\/p>\n

However, balanced doesn\u2019t mean risk-free. While bonds and shares can sometimes rise and fall at different times, there are periods when both fall together, and a balanced fund can still lose value. The word balanced refers to the mix of assets \u2013 not a guarantee of protection.<\/p>\n

The default KiwiSaver setting now places new default members \u2013 those who have joined KiwiSaver but not chosen their own fund \u2013 into a balanced risk category, reflecting this popular middle-ground approach .<\/p>\n

Things to consider: The pros and cons<\/strong>
\nAs with any investment, it\u2019s important to weigh up the potential benefits of balanced funds alongside the risks.<\/p>\n

The pros of balanced funds<\/strong>
\n\u2022 Diversification across shares and fixed income creates the potential to reduce overall portfolio risk
\n\u2022 Offers a ready-made mix of investments, so you don\u2019t have to choose individual assets yourself
\n\u2022 Potential for both growth and income in the fund over time<\/p>\n

The cons of balanced funds<\/strong>
\n\u2022 Balanced funds can still lose value during market downturns
\n\u2022 More limited potential for growth over time<\/p>\n

A balanced fund often suits investors who are willing to take on some risk for the potential of higher rewards down the track and have a medium-term timeframe \u2013 typically around five years or more. It can work for people who want to build wealth but don\u2019t want the added risk of a growth fund, or for investors approaching retirement who still want some growth potential alongside their income.<\/p>\n

The Milford difference<\/strong>
\nChoosing the right type of KiwiSaver fund is a key decision, and one we don\u2019t take lightly. At Milford, our focus is on helping you align your fund choice with your financial goals and timeframe. If a balanced fund sounds close but not quite right, we can help you compare options across conservative and growth settings too.<\/p>\n

That\u2019s why we offer free, no-obligation KiwiSaver advice, even if you\u2019re not a Milford client. You can also explore your options with our online digital tool<\/a>*.<\/p>\n

In part three of this series<\/a>, we\u2019ll dive into growth funds and how they aim to maximise long-term potential for investors with a higher risk tolerance.<\/p>\n

 <\/p>\n

\u00b9 www.canstar.co.nz\/kiwisaver\/new-zealands-top-10-kiwisaver-schemes<\/sup><\/p>\n

*The Milford KiwiSaver Plan digital advice tool is not suitable for persons aged 65 or older.<\/sup><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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