If you logged into KiwiSaver lately and saw a smaller number than you expected, you're not alone. Conservative funds went backwards in the September quarter, and last week US technology shares had one of their roughest days in a while.
The reasons are different depending on your fund type. Here's what's going on, why "conservative" doesn't mean "can't fall", and what's worth checking before you make any changes.
Why is my KiwiSaver going down at the moment?
It depends on your fund. Conservative funds have been hit by rising interest rates, while growth and aggressive funds are more exposed to share market swings like last week's tech sell-off.
Morningstar data reported by RNZ shows the average KiwiSaver conservative fund lost 1% in the three months to September. Moderate funds slipped 1.1%. Balanced and default funds were flat, growth funds gained 0.5% and aggressive funds added 1.3%.
Why would a conservative KiwiSaver fund lose money?
Because conservative funds hold a lot of bonds, and bond values fall when interest rates rise. That's what drove most of the losses last quarter.
A bond pays a fixed rate of interest. When new bonds start paying more, older bonds paying less become worth less to buyers, so their price drops. Massey University's Claire Matthews told RNZ this was likely to continue while rates are rising. It's not a new thing either. Koura founder Rupert Carlyon pointed out the same pattern showed up in 2023 when rates jumped.
The flip side is that bond values tend to rise when rates fall. And the longer view looks a lot better than one quarter. Over three years, conservative funds have returned an average of 6.4% a year, according to the same RNZ report.
How exposed is my KiwiSaver to the tech share sell-off?
If you're in a growth or high growth fund, probably more than you'd think. Big US tech companies now make up a large slice of global share indices, so many funds hold a fair chunk of them.
The tech-heavy Nasdaq index fell 6.3% in a single day last week, US time. RNZ looked at the top 10 holdings of several high growth KiwiSaver funds and found tech companies made up somewhere between about 17% and 26% of the money in those holdings. Index funds tend to hold whatever the index holds, while active managers make their own calls.
That cuts both ways. Funds with more tech exposure have had strong returns over the past few years, and one bad day doesn't undo that. But it's a good reminder to know what you actually own.
Should I switch my KiwiSaver fund after a fall?
Usually not as a reaction to one quarter or one bad day. Switching to cash or a conservative fund after a drop can lock in the loss and leave you out when markets recover.
The better question is whether your fund still matches when you'll need the money. Roughly:
- Buying a first home in the next couple of years? A lower-risk fund may suit, but know that conservative funds can still dip, as this quarter showed.
- Retiring within a few years? Many people keep part of their savings in a lower-risk fund and part in growth, because retirement can last 20 or 30 years.
- Ten or more years away? A growth or aggressive fund is built to ride out ups and downs like this.
We covered the risks of changing funds in a hurry in should you change your KiwiSaver during a downturn. Not sure your fund is right? Book a free 15-minute consultation and we'll look at it with you.
How can I check what my KiwiSaver fund invests in?
Start with your provider's latest fund update, which lists your fund's asset mix and top holdings. Sorted's Smart Investor tool also lets you compare funds side by side.
Look at three things: how much sits in shares versus bonds and cash, how concentrated the top holdings are, and what fees you're paying. Our guide on how to choose the right KiwiSaver fund walks through it step by step.
Common questions about falling KiwiSaver balances
Is a conservative KiwiSaver fund risk free?
No. Conservative funds are less likely to fall and tend to fall less when they do, but they can still lose money, especially when interest rates are rising.
Why did my KiwiSaver go down when the news says markets are up?
Your fund might hold more bonds than shares, or it might be invested in different markets than the ones in the headlines. Your fund update shows the mix.
Will my KiwiSaver recover?
Nobody can promise that, but markets have historically recovered from falls over time. How long it takes varies, which is why your timeframe matters so much when choosing a fund.
Can I stop contributing until things settle down?
You can apply for a savings suspension, but you'd miss out on employer contributions and could miss the government contribution. Talk it through before you pause.
How we can help
Invicta's KiwiSaver advice is fee-free. We'll look at your fund type, what it invests in, your fees and when you're likely to need the money, then explain your options in plain English. If your fund already fits, we'll tell you that too. Learn more about our KiwiSaver advice.
Don't let one bad quarter make the call for you
Falls feel personal when it's your retirement savings. A clear plan makes it much easier to sit tight, or to change course for the right reasons.
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Sources
- RNZ, Why are conservative KiwiSaver funds falling? (3 November 2026)
- RNZ, How exposed is your KiwiSaver to market wobbles? (6 November 2026)
- Sorted Smart Investor, compare KiwiSaver funds
- Inland Revenue, Taking a KiwiSaver savings break
General Information Disclaimer
The information in this article is general in nature and is not intended to be personalised financial advice. It does not take into account your individual goals, financial situation, needs, or circumstances.
Any examples, figures, rates, or scenarios are for illustrative purposes only and may change over time.
Before making any financial decision, you should consider whether the information is appropriate for your circumstances and, where appropriate, seek personalised advice from a licensed financial adviser.
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