Your savings in the scheme are pooled with those of other members and spread across many individual investments. Those investments fall into two basic categories: growth assets and income assets. Growth assets are best suited to long-term saving. Income assets are best suited to short-term saving. Here’s why. 

Growth assets are best suited to long-term saving. Income assets are best suited to short-term saving.

Growth assets (e.g. shares, which are also known as equities) tend to be volatile (up and down). You need to have time to ride out the highs and lows in the hope of a better return over time.

Returns from income assets (e.g. fixed interest) tend to be more consistent but lower over time. There's a chance returns may not keep pace with inflation over the long term.

UniSteps

With UniSteps, the mix of growth and income assets changes automatically as you get older. Up until age 45, your savings are invested in approximately 80% growth assets. From then, the percentage of growth assets is reduced gradually to approximately 20% from age 69. Here’s how it works. 

With UniSteps, the mix of assets changes automatically as you get older.

UniSteps uses three of the base investment options below – Growth, Balanced and Conservative – to transition your savings from predominantly growth assets to predominantly income assets over time. The investment mix changes on 1 November each year, not on your birthday or the anniversary of the date you joined UniSaver.

UniSteps is the default investment option if you don’t tell us how you would like your savings invested when you join UniSaver. We can change the default investment option from time to time.

Other investment options

If you prefer, you can create your own mix of growth and income assets by choosing one or a combination of four base investment options made up of growth and income assets mixed in different amounts. These options are Growth, Balanced, Conservative and Cash. You can choose to invest your savings in one option, or a combination of, the four options. Remember, if you put 50% in Growth and 50% in Conservative, you are effectively investing in Balanced. You can see how different combinations of the options look on the secure part of the website. Log in, select ‘Your investments’ and then the ‘Investment choice planner’ link. You can also choose different options for your existing account balances and for future contributions. You cannot mix and match between UniSteps and the four base options.

In addition to UniSteps, UniSaver offers four investment options each with a different mix of growth and income assets.

These percentages are the benchmark asset allocations for each investment option. Our investment manager may occasionally move away from the benchmark temporarily within specified ranges. See detailed benchmark asset allocations for each option below.

Here’s a more detailed comparison of the four base investment options.

Growth

Growth is expected to provide returns after tax and investment expenses of 2.75% above inflation over rolling 10-year periods. There is a reasonably small risk (approximately 1 in 20 years) of a member losing more than 15% in any year, with a current likelihood of a negative return of 1 year in every 4.

Balanced

Balanced is expected to provide returns after tax and investment expenses of 2.25% above inflation over rolling 7-year periods. There is a reasonably small risk (approximately 1 in 20 years) of a member losing more than 10% in any year, with a current likelihood of a negative return of 1 year in every 4.

Conservative

Conservative is expected to provide returns after tax and investment expenses of 1.0% above inflation over rolling 3-year periods. There is a reasonably small risk (approximately 1 in 20 years) of a member losing more than 5% in any year, with a current likelihood of a negative return of 1 year in every 4.

Cash

Cash aims to provide a return broadly in line with that of the S&P/NZX Bank Bills 90-Day Index after tax. There is a low risk of experiencing a loss in any one year. However returns may not keep up with inflation.

This table sets out the strategic asset allocations in place for each option.

Strategic asset allocations

The fourth base option - Cash - is allocated 100% to New Zealand cash.

Asset class

Growth %

Balanced %

Conservative %

Asset class

New Zealand cash

Growth %

2

Balanced %

2

Conservative %

20

Asset class

New Zealand fixed interest

Growth %

4

Balanced %

10

Conservative %

15

Asset class

Global fixed interest ($NZ hedged)

Growth %

10

Balanced %

30.5

Conservative %

44

Asset class

Global high yield ($NZ hedged)

Growth %

6.5

Balanced %

4.5

Conservative %

2

Asset class

Total income assets

Growth %

22.5

Balanced %

47

Conservative %

81

Asset class

Global listed property ($NZ hedged)

Growth %

4.5

Balanced %

3

Conservative %

1

Asset class

Global listed infrastructure ($NZ hedged)

Growth %

6.5

Balanced %

4.5

Conservative %

2

Asset class

Global equities ($NZ hedged)

Growth %

25.75

Balanced %

17.5

Conservative %

6.5

Asset class

Global equities

Growth %

25.75

Balanced %

17.5

Conservative %

6.5

Asset class

Australasian equities

Growth %

15

Balanced %

10.5

Conservative %

3

Asset class

Total growth assets

Growth %

77.5

Balanced %

53

Conservative %

19