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What is Risk Indicator?

The risk indicator is a 1-7 scale showing how volatile a KiwiSaver fund returns are likely to be.

Detailed Explanation

All KiwiSaver 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

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

Growth FundConservative FundBalanced Fund
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Investing involves risk. The value of your KiwiSaver 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.

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