Investor type – Conservative 2Mike Heath2024-07-04T11:38:25+12:00
The Conservative Investor
A ‘Conservative’ investor has little appetite for risk and is not comfortable seeing the value of their investments go up and down significantly. They take minimal risk, which minimises the ups and downs their investments may experience. This generally means they are willing to accept lower returns. They may need regular income from their investments to live on.
Exposure to growth and income assets will drive the performance of your investment portfolio i.e. the returns you generate, and the volatility (rise and fall of the value of your investments) you will experience.
A ‘Conservative’ investor typically has a portfolio with 10%-40% exposure to growth assets, like shares and property, with the remainder of the portfolio allocated to income assets, like cash and bonds.
It’s important to note that, while growth assets offer the greatest potential for returns, they generally come with a higher amount of risk i.e. you could potentially experience steep losses or gains.
The information above is sourced from Sorted as at July 2024. Past performance is not an indication of future performance. If you require individual advice, please speak to a licensed financial advisor.
Estimated range of returns:
-1.1% – 10.3%*
*According to Sorted, ‘Conservative’ investors can reasonably expect 4.5% returns (before fees and tax) per annum, while the full range of possible returns could be from -1.1% to 10.3%.
Diversified funds we have that may suit a Conservative investor
A diversified fund is a managed fund that is broadly invested across different assets, markets and regions. Diversified funds are designed with a pre-set mix of growth and income assets, that are aligned with different investor types and their appetite for risk.
Your investor type or the right mix of assets for you will depend on your investment objectives, timeframe and tolerance for risk.
In the table below, we have a number of diversified funds built specifically to match the growth and income asset exposure of a ‘Conservative’ investor type profile.
Fund
PDS
Description
Risk Category
Target Growth/Income Assets
Fee*
QFU Fee
Buy/Sell Spread
1 Month
3 Months
6 Months
1 Year
3 Years
5 Years
10 Years
Management Style
Available in the InvestNow KiwiSaver Scheme?
Foundation Series Total World Fund
The Fund aims for high long-run returns by investing in an Exchange-Traded Fund (‘ETF’) that invests in shares of large, mid-sized and small companies listed on international stock markets. The Fund’s objective is to perform broadly in line with the return of its investment benchmark before fees and tax over the long-term. The Fund’s investment benchmark is the Morningstar Global All Cap Target Market Exposure NR NZD Index.
Aggressive
100% / 0%
0.06
0.07%
0.50% / 0.50%*
−4.53%
−2.04%
9.97%
13.05%
–
–
–
Passive
Yes
Milford Active Growth Fund
The Fund’s objective is to provide annual returns of 10% after the base fund fee but before tax and before the performance fee, over the minimum recommended investment timeframe of seven years. It is a diversified fund that primarily invests in equities, with a moderate allocation to fixed interest securities.
Aggressive
78% / 22%
1.20
1.87%
0.10%**
−2.55%
0.29%
2.77%
6.60%
7.58%
12.47%
9.68%
Active
Yes
AMP Balanced Managed Fund
Aims to provide a well-diversified portfolio that has a balance of risk through holding growth assets and an allocation to lower-risk income assets.
Balanced
59.5% / 40.5%
0.80
0.80%
0% / 0%
−2.48%
−1.70%
1.71%
6.24%
–
–
–
Active
No
ANZ Investments OneAnswer Balanced Growth Fund
The Balanced Growth Fund invests mainly in growth assets (equities, listed property and listed infrastructure), with some exposure to income assets (cash and cash equivalents and fixed interest). The fund also has a small exposure to alternative assets.
Balanced
65% / 35%
0.99
1.03%
0% / 0%
−2.36%
−1.62%
−0.55%
2.98%
2.73%
7.33%
5.87%
Active
No
Brandywine Global Opportunistic Fixed Income Fund
The Fund invests in a diversified portfolio of international fixed income securities, derivatives and cash. The investment objective of the Fund is to earn a return before fees and taxes in excess of the Bloomberg Global Aggregate Index – New Zealand dollar Hedged over rolling five-year periods.
Balanced
0% / 100%
0.76
0.77%
0.075% / 0.075%
−0.15%
2.20%
−3.40%
0.23%
−2.09%
1.95%
–
Active
No
Foundation Series Balanced Fund
The Fund aims for mid-range long-run returns by investing in a diversified portfolio with a balance of income and growth assets. The Fund’s objective is to perform broadly in line with the return of its investment benchmark before fees and tax over the long-term.
The Fund’s investment benchmark is the weighted average return (before tax, fees and other expenses) of the asset class benchmark indices, which includes both New Zealand as well as international fixed interest and equity asset classes. The long-term returns from the Foundation Series Balanced Fund are likely to be lower and more stable than those of the Foundation Series Growth Fund.
Balanced
60% / 40%
0.37
0.37%
0.08% / 0.11%
−2.64%
−1.88%
1.99%
6.43%
5.54%
–
–
Active
Yes
Milford Australian Absolute Growth Fund
The Fund’s targets an absolute return with an annualised return objective of 5% above the New Zealand Official Cash Rate while seeking to protect capital after the base fund fee but before tax and before the performance fee, over rolling three year periods. The Fund has a minimum recommended investment timeframe of seven years.
It is a diversified fund that primarily invests in Australasian equities, complemented by selective exposure to international equities, fixed interest securities and cash.
Balanced
82.5% / 17.5%
1.25
1.05%
0.11%**
−1.14%
−1.58%
−5.00%
−3.67%
1.68%
9.24%
–
Active
No
Octagon Balanced fund
The fund aims to achieve positive long-term returns by selecting a mix of cash, fixed interest, equity and property investments. Investors can expect moderate to high levels of movement up and down in value, and to receive longer-term returns that are lower than those of the Growth Fund (but with less risk).
Balanced
55% / 45%
1.17
1.17%
0% / 0%
−1.83%
−1.01%
0.12%
3.82%
3.97%
–
–
Active
No
Mercer Core Global Shares Fund
The fund invests in shares listed on share markets predominately in developed economies. The portfolio uses multiple managers and is diversified by region, manager and investment approaches.
Balanced
100% / 0%
1.51
1.51%
0.13% / 0.13%
−4.31%
−1.90%
9.18%
10.93%
16.51%
17.21%
12.08%
Active
No
Fisher Funds Conservative Fund
The Fisher Funds Conservative Fund is a diversified portfolio that aims to provide moderate protection for your investment, while also providing a modest level of return over the short to medium term. It invests in mainly income assets (target 72.5%) with a small amount in growth assets (target 27.5%).
Conservative
27.5% / 72.5%
1.36
1.36%
0% / 0%
−1.10%
−0.25%
0.65%
4.55%
2.94%
3.14%
–
Active
Yes
Mercer Core Hedged Global Shares Fund
The fund invests in shares listed on share markets predominately in developed economies, and is fully hedged to the New Zealand dollar. The portfolio uses multiple managers and is diversified by region, manager and investment approaches.
Conservative
100% / 0%
1.74
1.74%
0.17% / 0.17%
−3.64%
−1.45%
−5.82%
2.05%
5.97%
14.44%
7.70%
Active
No
Mercer Global Shares Fund
The fund invests in international shares listed on share markets around the world by using investment managers from around the world which are combined in a multi-manager fund.
Conservative
100% / 0%
1.41
1.41%
0.12% / 0.11%
−3.87%
−1.37%
1.47%
7.27%
9.86%
14.93%
9.44%
Active
No
Milford Cash Fund
The Fund’s objective is to provide a return above the New Zealand Official Cash Rate. It primarily invests in New Zealand cash, short-dates debt securities and term deposits.
Conservative
0% / 100%
0.20
0.20%
0.00%**
0.33%
1.05%
2.29%
5.21%
4.72%
3.01%
–
Active
No
Mint Diversified Growth Fund
This Fund offers a diversified portfolio and aims to provide capital growth over the long-term. The Fund invests primarily in New Zealand and international equities, but will also hold cash and fixed interest securities. The objective of the Fund is to deliver returns in excess of the Consumers Price Index (CPI) by 4.5% per annum, before fees, over the medium to long-term. The relevant market index for the Fund is a composite index derived from the underlying asset classes of the Fund.
Conservative
80% / 20%
1.21
1.18%
0% / 0%
−5.34%
−2.81%
−1.30%
2.68%
3.21%
9.59%
–
Active
Yes
QuayStreet Income Fund
A diversified portfolio with an emphasis on income producing assets. The objective is to provide a level of return above the Fund’s benchmark over the long term, while preserving the real value of investments relative to inflation.
Conservative
20% / 80%
0.76
0.76%
0% / 0%
0.13%
0.81%
1.81%
6.28%
5.03%
4.75%
4.62%
Active
No
Harbour Australasian Equity Focus Fund
A concentrated ‘best ideas’ growth fund holding Australasian listed equities (usually 15 to 25) which receive a high rating from our in-house analysts. The Fund is designed to deliver strong growth over the long term, through investing in a smaller number of high quality companies with strong growth prospects.
Conservative
95% / 5%
1.36
1.16%
0% / 0%
−6.70%
−8.59%
−4.16%
2.65%
0.38%
10.88%
9.97%
Active
Yes
AMP Growth Managed Fund
Aims to provide a well-diversified portfolio that aims to provide growth, primarily through holding growth assets diversified with a lower allocation to lower-risk income assets.
Growth
80.5% / 19.5%
0.80
0.80%
0% / 0%
−3.25%
−2.62%
2.06%
6.59%
–
–
–
Active
No
Fisher Funds Growth Fund
The Fisher Funds Growth Fund is a diversified portfolio that aims to grow your investment with more focus on capital growth over the long term. It invests in mainly growth assets.
Growth
81% / 19%
1.47
1.47%
0% / 0%
−4.04%
−3.53%
0.00%
3.27%
5.14%
8.67%
–
Active
Yes
Foundation Series Global ESG Fund
The Fund aims for high long-run returns by investing in Exchange-Traded Funds (‘ETFs’) that invests in shares of large, mid-sized and small companies listed on international stock markets. The Fund incorporates certain responsible investment considerations and is exposed to investment strategies that seek to exclude companies involved in particular business practices. The Fund’s objective is to perform broadly in line with the return of its investment benchmark before fees and tax over the long-term. The Fund’s investment benchmark is a composite index consisting of 67% FTSE USA All Cap Choice TR NZD Index and 33% FTSE Global All Cap ex USA Choice TR NZD Index.
Growth
100% / 0%
0.10
0.10%
0.50% / 0.50%*
-3.53%
–
–
–
–
–
–
Passive
No
Foundation Series US 500 Fund
The Fund aims for high long-run returns by investing in an Exchange-Traded Fund (‘ETF’) that invests in shares of the largest companies listed on stock markets in the United States. The Fund’s objective is to perform broadly in line with the return of its investment benchmark before fees and tax over the long-term. The Fund’s investment benchmark is the Morningstar US Target Market Exposure TR NZD Index.
Growth
100% / 0%
0.03
0.03%
0.50% / 0.50%*
−6.59%
−5.30%
10.14%
14.44%
–
–
–
Passive
Yes
Mercer Sustainable Balanced Fund
The fund is a diversified portfolio with a slightly higher allocation to a mix of growth assets (e.g., shares and listed property) relative to a mix of income assets (e.g., cash and fixed income). The fund has been certified by the Responsible Investment Association of Australasia.
Growth
60% / 40%
1.32
1.32%
0.12% / 0.12%
−2.21%
−2.07%
−0.15%
3.46%
3.17%
7.20%
5.03%
Active
Yes
Mercer NZ Shares Passive Fund
The fund is a passively managed New Zealand shares portfolio that is designed to track the return of the S&P/NZX 50 Index.
Growth
100% / 0%
0.34
0.34%
0.13% / 0.13%
−3.00%
−3.52%
1.54%
7.87%
2.32%
2.74%
–
Passive
Yes
Mint Australasian Property Fund
This Fund typically invests in New Zealand and Australian listed property securities and has an investment objective of outperforming the S&P/NZX All Real Estate (Industry Group) Gross Index by 1% per annum, before fees, over the medium to long-term.
Growth
95% / 5%
1.05
1.05%
0% / 0%
−4.21%
−5.60%
−8.04%
−8.05%
−5.80%
1.84%
4.18%
Active
No
Pathfinder Ethical Growth Fund
A highly diversified global portfolio that invests in companies meeting Pathfinder’s Ethical Investment guidelines. These guidelines focus on selecting companies benefitting our planet and people, and also excluding companies and industries that are harmful. The team at Pathfinder believes this approach will deliver both financial returns and better environmental and social outcomes. The Pathfinder Ethical Growth Fund has a portfolio with a higher exposure to growth assets and a lower exposure to income assets. Investments are spread across multiple asset types, geographies, companies and sectors to provide diversification. The investment strategy includes management of foreign currency exposure to New Zealand dollars.
Growth
71.8% / 28.2%
1.33
1.30%
0% / 0%
−3.76%
−4.16%
−1.38%
2.92%
4.82%
–
–
Active
Yes
Risk Category
* Fees are the manager’s estimates of the total annual fund charge as outlined in the Product Disclosure Statement (PDS). Note that this figure includes GST and any performance-based fees where applicable. Transaction-based charges may also apply when you buy or sell a fund, which could include buy/sell spreads, entry/exit fees, or swing pricing adjustments. Please see the PDS for full details on the charges that can apply. Past performance is not a reliable indicator of future performance. Read each fund’s PDS for more information.
Use our Investment Balance Calculator to see your estimated end investment value
*The default annual return rate is 4.5%, which is the estimated annual return for a ‘Conservative’ investor type, according to Sorted.
Results
Starting amount: $0
Contribution total: $0.00
Return total: $0.00
Final Amount in 0 years: $0
*‘Starting Amount ($)‘ is the current combined total dollar value of your savings and investments. *‘Estimated Annual Return Rate (%)’ is the average annual return you expect to receive. *The ‘Estimated Annual Return Rate (%)’ that you input into the calculator represent gross figures, and do not take into account the effects of any fees, taxes or inflation. You are also not guaranteed to achieve this Estimated Annual Return Rate each year nor in any one year. *The ‘Final Amount’ is not guaranteed. It is an estimated projection to help you with decisions about your fund choice, the risk associated and how much you should contribute. This Final Amount does not take into account the effects of any fees, taxes or inflation and assumes consistent contributions and a consistent annual rate of return.
The benefits of diversified funds…
Easy access to a diversified pool of investments that are aligned to a wide range of investor needs. This allows for a more transparent and guided investment experience, that is suitable for retail investors.
Investments are spread across asset classes (e.g.shares, property, bonds, and cash) based on the target growth/income asset exposure ratio, according to the fund’s name. For example, a diversified fund with ‘Conservative’ in the name will have 10% – 40% exposure to growth assets and the remainder allocated to income assets.
Offers other types of diversification, like sector diversification (e.g. technology, healthcare, infrastructure), regional diversification (e.g. local and international assets), currency diversification etc.
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