What is Risk Indicator?
The risk indicator is a 1-7 scale showing how volatile a KiwiSaver scheme fund returns are likely to be.
Detailed Explanation
All KiwiSaver scheme funds must display a risk indicator from 1 (lowest risk/lowest expected returns) to 7 (highest risk/highest expected returns). This is calculated based on historical volatility over 5 years.
Example
Illustrative example — A conservative fund typically has a risk indicator of 2-3, a balanced fund 3-4, and a growth fund 5-6.
Frequently Asked Questions
Should I avoid high-risk funds?
Not necessarily. Higher risk funds suit longer timeframes where you can ride out volatility.
Does a low risk indicator guarantee no losses?
No. Even low-risk funds can lose value in some periods.
Related Terms
Compare every fund on the FMA Disclose register. Refreshed quarterly. Independent — FundCompare is not a Financial Advice Provider; general information only.
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Investing involves risk. The value of your investment can go down as well as up, and you may get back less than you put in. Past performance is not a reliable indicator of future returns.
Before making any investment decision, you should read the Product Disclosure Statement (PDS) for the fund carefully. If you have questions or are unclear about the implications of your investment decision, you should seek advice from a licensed Financial Advice Provider.
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