Growth Fund
A KiwiSaver or managed fund that invests mostly in shares. Higher risk, higher potential returns. Suitable for younger investors with 10+ years until they need the money.
A growth fund invests primarily in higher-risk, higher-return assets like shares (equities) and property. A typical growth fund might have 80% in growth assets and 20% in income assets.
Over long periods (10+ years), growth funds have historically delivered significantly better returns than conservative funds, but with more volatility along the way. Your balance will go up and down more in the short term.
Growth funds are generally recommended for younger investors who won't need the money for 10+ years. The longer your time horizon, the more time you have to ride out market downturns and benefit from compound growth.
Why this matters
If you're in your 20s or 30s with decades until retirement, being in a growth fund is one of the most impactful financial decisions you can make. The difference between a conservative and growth fund over 30+ years can be hundreds of thousands of dollars, thanks to compound returns. Use the Sorted KiwiSaver fund finder to check if your current fund matches your situation.
More KiwiSaver terms
KiwiSaver
New Zealand's voluntary retirement savings scheme. You contribute a percentage of your salary (3.5%, 4%, 6%, 8% or 10%), your employer contributes at least 3.5%, and the government adds up to $260.72 a year. Money is locked until age 65 (with exceptions for first home and hardship).
KiwiSaver First Home Withdrawal
After 3+ years of contributing, you can withdraw most of your KiwiSaver balance to buy your first home. You must leave $1,000 in the account.
First Home Grant
Closed. The First Home Grant stopped taking new applications on 22 May 2024 and is not returning. It paid $3,000-$10,000 per person to first home buyers who met KiwiSaver contribution and income tests. The KiwiSaver first-home withdrawal and the First Home Loan are the schemes that still exist.
PIE Tax
Portfolio Investment Entity tax. The tax rate on your KiwiSaver and managed fund returns. Your rate depends on your income: 10.5% (under $14K), 17.5% ($14-48K), or 28% (over $48K). Set it correctly to avoid overpaying.
Put this knowledge to work
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