We have observed a dramatic increase in the overall risk categorisation of KiwiSaver funds in recent years. The proportion of KiwiSaver invested in risk category 5 funds (high volatility) has quadrupled from around 10% in 2021 to more than 40% in 2024, with the proportion in risk category 3 funds (low to medium volatility) decreasing from 30% to 10% over the same period.
This paper describes the observed increase and discusses potential drivers, including changes to policy settings, investor behaviour, and market volatility. It appears that the observed increase reflects a combination of these factors. Regardless of cause, KiwiSaver has become notably weighted towards higher-risk funds over time.
Download the Increased risk profile of KiwiSaver funds 2021-2024 [PDF 442KB]
