Section 4What are the risks of investing?

Understanding the risk indicator

Managed funds in New Zealand must have a standard risk indicator. The risk indicator is designed to help investors understand the uncertainties both for loss and growth that may affect their investment. You can compare funds using the risk indicator.

The risk indicator is numbered 1 to 7 with 1 indicating lower risk/potentially lower returns and 7 indicating higher risk/potentially higher risk.

The tables on pages 2 and 3 show the filled-in risk indicator for each option.

The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the fund’s assets goes up and down (volatility). A higher risk generally means higher potential returns over time, but more ups and downs along the way.

To help you clarify your own attitude to risk, you can seek financial advice or work out your risk profile at [external link].

Note that even the lowest category does not mean a risk-free investment, and there are other risks that are not captured by this rating.

This risk indicator is not a guarantee of a fund’s future performance. The risk indicator is based on the returns data for the 5 years to 31 March 2022. While risk indicators are usually relatively stable, they do shift from time to time. You can see the most recent risk indicator in the latest fund update for each fund.

General investment risks

Some of the things that may cause a fund’s value to move up and down, which affect the risk indicator are:

Investment risks


Investment risk

The possibility of your investment either losing value or not gaining value and therefore not meeting your return expectations.

Market risk

The value of investments may rise or fall as a result of developments in economies, financial markets and regulatory or political conditions. The performance of individual assets, securities and issuers can impact returns.

Company risk

The financial uncertainty faced by an investor who holds securities in a specific company. Company risk can be mitigated through diversification.

Credit risk

The risk of a counterparty to UniSaver not being able to make payment obligations.

Currency risk

As some of the assets in the funds are invested overseas, returns in New Zealand can be affected by movements between the New Zealand dollar and overseas currencies.

Other specific risks

We are not aware of any circumstances that exist or are likely to arise that significantly increase the risk to returns for investors other than circumstances already reflected in the risk indicator.

See the document Other material information [PDF, 165 KB] on the offer register at [external link] for more information about risks.