Investment NZ: Morningstar's Top Conservative KiwiSaver Funds For 2021

Mar 3, 2021
By Staff writer

Your own KiwiSaver contribution is one easy way to get you started with investing, and prepare you for emergencies or your retirement years.

KiwiSaver is a voluntary savings scheme established by the New Zealand government, and you have the option to choose how much you can contribute ( 3%, 4%, 6%, 8%, or 10%) from your salary to your chosen KiwiSaver account. Aside from the employer contributions, there’s also an annual government contribution.

With so many KiwiSaver providers, schemes, and investment funds to choose from, picking the right KiwiSaver plan for you can be challenging at first. If you’re looking for average long-term returns and aren't willing to take a lot of risks, you might want to consider conservative KiwiSaver funds.

Here's a list of Morningstar’s quarterly KiwiSaver Survey of the top conservative KiwiSaver funds as of December Quarter 2020, released last January 27, 2021.

What is conservative investing?

It's an investment strategy that protects your money by prioritizing its preservation more than the returns. This means most of your money will be invested in lower-risk securities such as fixed-income and money market securities to protect your portfolio’s value.

If you're a conservative investor, your risk tolerance most likely ranges from low to moderate, and your investment portfolio will consist mainly of low-risk, fixed-income investments and a small number of high-quality stocks or funds.

While a conservative fund is a good option because it protects you from inflation, it's also important to keep in mind that returns may not be as significant as other aggressive, high-risk investment funds and strategies.


Should I get a conservative KiwiSaver fund?

It's all up to you! A conservative fund is a good option for people who don't want to risk their money and have long-term goals, such as retirement planning or a child's education.

Ready to grow your money? Here are the top conservative KiwiSaver funds to consider:

Milford Conservative Fund

Total returns (3 months) - +3.1%

Milford's Conservative Fund is best for investors looking for medium returns and better capital protection with a minimum investment period of 3 years. This means that your investment is diversified and has a lower risk, essentially, with fixed interest securities and a reasonable allocation to equity.

Base fund fee: 0.95%

Income / Growth Assets: 82% / 18%

Here’s the target asset allocation of Milford Conservative Fund (As of September 2020): 

Australasian Equities 4%
International Equities 9%
International Fixed Interest 50%
Cash and Cash Equivalents 7%
New Zealand Fixed Interest 25%
Listed Property 5%

Aon Russell Lifepoints Conservative Fund

Total returns (3 months) - +2.9%

The Rusell Lifepoints Conservative Fund aims to produce returns in excess of inflation by investing mostly in income assets with only a modest allocation to growth assets.

Base fund fee: 1.10%

Income / Growth Assets: 80% / 20%

Can't decide which KiwiSaver fund to get? Compare offers and find the right one for you here at glimp!!

CareSaver Conservative Fund

Total returns (3 months) - +2.7%

CareSaver Conservative has a portfolio with higher exposure to income assets and lower exposure to growth assets. Investments are diverse, which means they are spread across geographies, companies, and sectors. Compared to Balanced Fund or Growth Fund, this fund’s value is less likely to fluctuate as much. Its objective is modest returns with a fair risk focus, best for investors with a time frame of up to 3 years.

CareSaver takes pride in being ethical by investing in companies with a positive influence on our planet, including those actively lessening their carbon use.

Base fund fee: 1.10%

Income / Growth Assets: 80% / 20%

ANZ Conservative Fund

Total returns (3 months) - +2.5%

The fund invests mainly in income assets, with a smaller exposure to growth assets such as equities and listed property. Apart from this, it may also invest in alternative assets. This fund's primary goal is to achieve investment performance ahead of inflation over the long term and achieve investment performance that reflects the level of risk applicable to the fund's underlying asset classes.

Base fund fee: 1.06%

Income / Growth Assets / Cash: 60% / 20% / 20%

OneAnswer Conservative Fund

Total returns (3 months) - +2.5%

The fund invests mainly in income assets (cash and cash equivalents and fixed interest), with a smaller exposure to growth assets (equities, listed property, and listed infrastructure). The fund may also invest in alternative assets.

Base fund fee: 0.85%

Income / Growth Assets / Cash: 50% / 35% / 15%

Start saving for you and your family's future as early as today! Find the most suitable KiwiSaver scheme based on your needs from some of the best KiwiSaver providers in New Zealand.

Compare these KiwiSaver investment schemes using our comparison tool, right here at glimp!

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