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Investors urged not to panic over KiwiSaver

Daniel Smith

As many KiwiSaver funds face some of the lowest returns in more than a decade, it is more important than ever for investors to take a close look at their KiwiSaver fund, the Financial Markets Authority says.

The combination of global interest rate hikes, the Russian invasion of Ukraine, and supply chain disruptions have meant this year many KiwiSaver funds may face mediocre returns or a loss.

FMA investor capability manager Tammy Peyper cautioned investors not to panic if they saw their KiwiSaver returns had decreased.

She advised investors to take a breath, step back, and read the details on their KiwiSaver annual statement to better understand why the returns of many funds had taken a dive. ‘‘Because so much is happening in the market, investors will want to take control of their KiwiSaver.

‘‘The first step to doing that is reading your KiwiSaver fund annual statement,’’ Peyper said.

The KiwiSaver annual statement is a document fund managers are required to send to members each year.

It gives a snapshot of the performance of the fund, its profits and losses, and a projected balance of estimated value when the investor reaches retirement age.

But FMA research showed last year more than 80% of KiwiSaver investors did not bother to thoroughly read their statement.

And only 25% of investors believed they were on track to reach their fund goals after reading their estimated fund size at retirement.

Peyper said it was important for investors not to make any rash

Financial Markets Authority

‘‘Sometimes the best thing to do is stick to your long-term plan.’’ Tammy Peyper

decisions.

‘‘When people see their KiwiSaver has dropped, they may want to do something to remedy it.

‘‘But sometimes the best thing to do is stick to your long-term plan.

‘‘Remember, choosing to not do anything is an active decision.’’

In March last year, a large number of KiwiSaver members aged 26 to 35 switched their KiwiSaver to a less volatile fund. Many locked in losses and missed out on economic recovery when markets bounced back.

Massey University associate professor Claire Mathews said the

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2022-05-28T07:00:00.0000000Z

2022-05-28T07:00:00.0000000Z

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