Should I change funds when markets fall?

Seeing your KiwiSaver balance fall can be unsettling, especially when market headlines are negative.

It's natural to wonder whether you should switch to a lower-risk fund. But markets rise and fall, and changing funds in response to short-term movements can mean locking in losses and potentially missing a recovery.

Before making a change, it's worth considering why you chose your fund in the first place: your goals, your investment timeframe and how comfortable you are with market ups and downs.

A useful way to think about your fund choice is matching your investments to when you expect to use your KiwiSaver money.  

• Long time horizon: growth may matter more  

• Closer to using the money: stability may matter more  

Timeframe matters.

If you have many years before you expect to use your KiwiSaver savings, short-term market movements are only one part of a much longer investment period. If you'll need your money sooner, stability may matter more. 

Diversification helps spread your money across different investments and markets, reducing your reliance on any one of them. 

There isn't one fund that's right for everyone. What matters is having a fund that still suits you - rather than changing simply because markets have changed. 

There’s no single right answer, but reviewing your fund choice occasionally can help make sure it still fits your goals. 

Our Fund Finder asks a few simple questions to help you find a Smart KiwiSaver Scheme fund that could suit you.