Should I switch my KiwiSaver to a conservative fund if buying soon?

Short answer: Yes if buying within 3 years. Conservative funds protect your deposit from market drops.

What this actually means in plain English

If you plan to buy within 3 years, yes. Conservative funds hold mostly cash and bonds. They do not grow as fast but they do not drop as much either. Growth funds can lose 20% in a bad year. If your house deposit drops 20%, you might no longer qualify for your mortgage.

Key Facts

Conservative funds: mostly cash and bonds, low risk
Growth funds: mostly shares, higher risk and return
Growth funds can drop 15-25% in a market crash
Switching takes effect immediately with most providers

Example

Balance: $30,000

Growth Fund Drop: -20% = $24,000

Conservative Fund Drop: -2% = $29,400

Difference: $5,400 more preserved in conservative

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