What is Asset Allocation?
Asset allocation is how your KiwiSaver fund divides investments across different asset types like shares, bonds, and cash.
Detailed Explanation
Your fund strategic asset allocation determines its risk and return profile. Growth funds allocate more to shares and property (growth assets), while conservative funds allocate more to bonds and cash (defensive assets).
Example
A typical balanced fund might have 50% in shares, 10% in property, 30% in bonds, and 10% in cash.
Frequently Asked Questions
Can I choose my own asset allocation?
Some providers offer DIY options, but most funds have a fixed strategic allocation.
Should I change allocation as I age?
Many experts suggest shifting to more defensive assets as you approach retirement.