Photo: RNZ
Some KiwiSaver managers had already shifted some of their growth fund investments into more defensive assets, including cash, before Trump's tariff turmoil hit.
But whether they managed to shield their members from the full extent of the market downturn will depend on how they navigate the next steps.
Markets have been extremely volatile since US President Donald Trump unveiled his plans for wide-ranging tariffs.
That has meant a hit to many KiwiSavers' balances, particularly those in growth and aggressive funds, which have the highest exposure to assets such as shares.
But some active managers - who make active choices about where members money is invested, as opposed to passive managers who track an index - had already made moves that may have helped their investors' balances.
At Pie Funds, chief executive Ana-Marie Lockyer said its growth fund had 11.3 percent cash and cash equivalents at the end of March, compared to a target of 5 percent.
"Periods of policy unpredictability, especially ones we've seen during Trump's current and past presidency, create a landscape where active managers can truly earn their fees. When sectors rise and fall on tweets, tantrums, and tariffs, being nimble, selective, and risk-aware isn't just helpful, it's necessary," she said.
"Active managers can react fast when it comes to reallocating capital, reconsidering sector weights, and using tools like cash or hedging to mitigate downside risk; we can zero in on the winners as they evolve, and exploit inefficiencies."
At Nikko, its growth fund was at 4.38 percent cash compared to a target of 3 percent.
Exposure to US scaled back
Milford Asset management head of KiwiSaver Murray Harris said it had been limiting its exposure to the US in particular and equities in general recently.
Before the turmoil hit, the growth fund had moved to 13 percent or 14 percent cash, he said, but some of that had since been invested in "buying the dip" in the past week, he said. The exposure to equities was about 66 percent compared to a normal rate of about 78 percent.
Traders work on the floor of the New York Stock Exchange at the opening bell in New York City, on April 3, 2025. Photo: AFP / Charly Tribelleau
Harris said managers could not promise to avoid all the negative movement in the market but could work to limit it.
ANZ said its high-growth fund had almost 5 percent cash and its growth fund had 20 percent in income assets, including 17.5 percent in fixed interest and almost 2 percent in cash.
"When uncertainty hits and markets fall, we know it's hard for investors to sit and watch their account balance go down," ANZ Investments' chief investment officer George Crosby said.
"We understand they may be worried, but it's important to remember that markets do go up and down. Changing your investment fund now could cost you, as you might miss out on any rebound when markets recover. And trying to time the market can lead to buying high and selling low, which can hurt your long-term returns.
"Instead, we recommend people stay focused on their long-term goals and continue making regular contributions if they can. They should also check they are in the right fund for their life stage and investment objectives."
Crosby said ANZ diversified its portfolios across different asset classes and regions of the world.
"We are focused on holding quality investments with strong fundamentals. Companies with solid balance sheets and consistent earnings are more likely to weather economic downturns. We view market corrections as opportunities to buy quality assets at more attractive prices."
Amanah Ethical KiwiSaver had 10 percent cash.
Pathfinder said its growth fund was 9.7 percent in cash and 16.7 percent in defensive sectors such as communication services, consumer staples and health care. "While some action will be taken within a fund, we don't try to time markets. We don't just focus on the last quarter's economic headwinds or headlines, nor do we try to predict unpredictable market volatility. What's most important is ensuring you're in the right KiwiSaver fund, that aligns with your risk profile, and staying in it."
Photo: 123RF
Investing in gold 'a great diversifier'
ASB's investment committee member Frank Jasper said its benchmark allocations were broadly in line with other fund types. He said 78 percent of its growth fund was in growth assets.
"Over the past year we have diversified ASB funds away from larger US companies, introducing an exposure to global infrastructure securities. We also have an allocation to gold that has been a great diversifier in the portfolio, up around 40 percent in 2024."
Lockyer agreed the message remained that individuals should stay the course in funds that aligned with their investment goals.
"We always see some KiwiSaver members shifting to conservative funds during market turbulence - this remains a worrying trend … While it may feel like a safe move in the moment, such decisions often lead to worse long-term outcomes, locking in losses and missing the recovery. Investors in all products should resist the urge to react emotionally and instead focus on long-term investment principles that have consistently proven successful over time.
"As a reminder, Australia provides a compelling case study on the perils of reactionary switching. During the Covid-19 market turbulence, around 70 percent of Australian retirement fund members who switched to conservative funds ended up worse off than if they had stayed put."
Data director at Morningstar Greg Bunkall said how a fund was invested going in and out of events like the tariff volatility would be the biggest factor determining managers' outcomes.
"If the manager had been risk off - underweight growth assets, going into this event, and then risk on - overweight growth assets - when the market eventually climbs out of the event, then they will have a relatively good result. If they get the timing right, it's going to serve their investors very well. However, getting that timing right is very challenging and not thought of to be a repeatable skill set."
