Welcome to our KiwiSaver Q&A, created specifically to help you through this financial crisis.  If after reading the answers you still have queries, you can message or email us for help.

The answers are written by John Berry (CareSaver CEO) and Paul Brownsey (CareSaver Head of Investment).  Paul and John have been in financial markets through the 1997 Asian crisis, 1998 Russian crisis, 2000 dot-com crash, 2001 terrorist attacks and 2008 GFC. With this experience they remain calm while others may panic. Between them, their careers have included stints working in Europe, Asia, the US, New Zealand and Australia.

If you have concerns about your KiwiSaver and are not a CareSaver investor, do contact your KiwiSaver provider for help. We assure you that every KiwiSaver manager in the country has been designated an “essential service” and is committed to looking after their investors.  These are difficult times for our communities and our savings, we are 100% focused on our CareSaver investors and the wellbeing of our CareSaver team.

Simple KiwiSaver questions

Your KiwiSaver Fund is invested in shares, bank deposits and bonds. Some will be in New Zealand and many will be from countries worldwide.  The shares and bonds are generally traded on international markets.

The value of these shares and bonds has fallen because of concerns around how the Covid-19 virus will impact the global economy.  Airlines are grounded, shops are shut, construction sites are on hold and tourist sites are closed.  In New Zealand only essential services are operating from their normal premises – and this is repeated in countries around the world.  This will harm company profitability, employment and taxes received by the government.

Investors have responded by selling shares and bonds in affected companies.  Investors are also working out which companies are now higher risk by looking at the strength of a company’s balance sheet, cashflow and how much bank support they have.   As the values of these fall, it drags down the value of your KiwiSaver account.  As you would expect, the value of some companies has fallen significantly.

Many businesses are continuing to operate, such as electricity companies, healthcare companies, supermarkets and food producers.  They should remain profitable and so their share price should not fall as much, and in some cases may go up. Our community needs these companies more than ever right now.

At CareSaver we are an active manager, and select companies with viable and profitable ongoing businesses. We avoid those that are at risk, including casinos, hotels and oil companies.  In our view, now is the time to be selective and only hold quality stocks.

What we have written above is not relevant to the CareSaver Conservative Fund.  Those lucky investors of ours have seen their KiwiSaver balance actually increase over this crisis period.  A big thank you to the CareSaver investment team for that remarkable achievement

That is a tough one. We know investment values and KiwiSaver balances will recover, but no one knows exactly when. There are a lot of variables at play, including:


  • How well will health systems cope across Europe, Asia, Africa and the US – as well as here in New Zealand?
  • How long will countries remain in isolation?
  • Can something unexpected fight the virus like a vaccine, warmer northern hemisphere temperatures or (eventually) herd immunity?
  • How many companies will not survive because they run out of cash?
  • How much more help will governments give to keep the economy ticking over?
  • Exactly how much will economies globally slump by, and for how long?

Active investors are constantly considering these factors, as well as valuing each individual company.  When investor pessimism switches to optimism, then prices will recover.

Markets, which are essentially the aggregate of all investor views, often anticipate turning points well before they happen.  For example, key indicators like trends in new Covid-19 cases and signals from political leadership give investors very useful information around when we may be approaching the worst.  Markets will often start a recovery at this point, meaning share prices can recover early, even when things still look really desperate.

Based on our expectations of how hard company earnings will be hit and how long it will take to recover, we believe that international shares are not now excessively valued.  It is entirely possible that markets could go lower from here, we don’t pretend to have a crystal ball. However, we believe that in a year’s time we will look back at today and say “wow, we bought some bargains.”

If you keep contributing to your KiwiSaver every month you are buying at much cheaper prices.  When the market recovers you will have bought at the bottom – for this reason we encourage people to keep making monthly contributions.

For the moment we remain active and agile.  When we need to, our investment team can be up most of the night monitoring markets for our investors.  We have much larger cash holdings than normal, we are adjusting our currency positions, we are focused on defensive and quality companies.

Essentially, we have been working to protect as much value as possible in the downturn, and we must also capture the gains when the market turns.  We can’t tell you the exact day or month that your value will go up again, but we are vigilant.  We are also mindful that history tells us the sharpest market falls tend to have the most rapid recoveries – and this has been the sharpest market fall ever.

If you are in a growth fund and switch to a conservative fund, you lock in your loss.  Prices will recover at some point and you will find it harder to make back those losses. This is because conservative funds hold more cash and bonds than growth funds (which hold more shares).  Shares tend to go up and down a lot but over the long-term they consistently deliver the best returns.

Look back at every major market crash, for example in 1929 (the Great Depression), 1987 (Black Monday), 1997 (Asian Crisis), 1998 (Russian Crisis), 2000 (dot-com crash) and 2008 (the GFC). Markets were hammered but later returned to new highs.  Keep your patience and resilience – history tells us your money won’t be gone forever.

At CareSaver we have been very focused on managing the risk as markets fall.  Our Conservative Fund owns shares and yet, remarkably, it has positive returns over the crisis period.  Our Balanced Fund and Growth Fund are down but are performing extremely well in the crisis conditions.  Our investment team have done an incredible job of limiting any losses.  We have been able to do this because we are an active manager, meaning we have a range of tools we can use when markets are falling.  These include:


  • moving to cash
  • adjusting currency hedges to manage risk
  • selecting defensive and high-quality shares
  • actively avoiding “at risk” companies and industries
  • we also have other sophisticated investment tools we can use to hedge exposures

Please let us know if you want more information.

In this article, we explain why your investment balance will not collapse to zero.  We also explain the structure of KiwiSaver and how your money is safely held in custody for you – no one can simply help themselves to it.

See the full article here

There is always a bright side and we don’t have to look too hard to find snippets that should help keep you cheery.  Here’s our top 5:

1)      Markets recover: In every major market crash – 1929 (the Great Depression), 1987 (Black Monday), 1997 (Asian Crisis), 2000 (dot-com crash) and 2008 (the GFC) – markets have been hammered but later returned to new highs. In what looked like tough times, investors who were selective could pick up bargains. 2020 will be no different.

2)      Pheonix always rises from the ashes: In the dot-com crash (2000) scores of tech companies had no revenues and no value.  In the market collapse the US tech share index fell by an astonishing 78%, meaning a $100 investment went to a paltry $22.  But out of the carnage rose companies generating staggering returns for investors – like Amazon, Google and eBay.

3)      Active and ethical investment helps: An active manager can avoid the worst by holding quality companies. Avoid holding airlines, hotels, oil companies or casinos right now. Instead invest in companies still generating value like healthcare companies, utility companies and supermarkets. There is demand for their services even through a global crisis.  As an ethical investor we also focus on companies with high social and environmental metrics – research shows these are more robust and generally fall by less in a market downturn.

4)      Buy bargains: If you continue contributing to your KiwiSaver every month you are buying shares at what in a years’ time will look very cheap.  Everyone likes a bargain.

5)      Our Conservative Fund is up: Remarkably, CareSaver’s Conservative Fund has actually made money over the period of the crisis.  How’s that for a bright side for our Conservative Fund investors?

Keep your optimism and look on the bright side. The darkest hour is just before the dawn.

More detailed answers to questions

If your risk profile is as a “growth” investor we believe you should stay in your growth fund.  Here’s why –

5 tips to avoid chaos in your KiwiSaver

All managers have different approaches to investing. For example some are active and some are passive.  Some can move to cash, adjust currency hedging and use other tools, while some managers don’t.  Here’s what we think you should be asking your manager at the moment –

5 questions to ask right now

Do you wonder what KiwiSaver managers are doing and thinking through this crisis?  Here are insights from our Head of Investment (Paul Brownsey) when he was interviewed by the online investment platform Sharesies –

Here’s what our Head of Investment is thinking

Oil and coal companies are really bad places to invest your money.  They have been hit hard this year but have actually underperformed the rest of the market by a lot for the last decade.  We don’t invest in fossil fuel companies because they contribute to climate change. But you also don’t want them in your KiwiSaver because they will continue to be bad investments.  Here’s why.

Read here

Investing ethically is core to the way we run CareSaver KiwiSaver.  We go way further than simply avoiding companies and industries that harm our planet and people.  We actively seek out companies that score highly on environmental, social and governance metrics.  We strongly  believe ethical companies make better long term investments.  Our mission is to do well and do good for our investors and our planet.  Here’s how we do it.

Read here

You can switch managers at any time, it is an easy and online process.

The transfer should not impact your returns.  If you decide to switch managers, your KiwiSaver balance is paid over to your new manager in cash.  The new manager then invests it in the fund you have chosen.  Check with your manager if they have any charges – that would be rare.  CareSaver, for example, has no charges for you to join us or to leave.

Because your money is transferred from one manager to another you might not have your KiwiSaver balance invested in the market for a very short time.  We would expect that to be 2 days.

So switching does not cost you.  In that case we encourage you to do your research and choose the manager who you believe will best look after your interests.  This means investing in line with your values and generating the best returns for you.

Keep us in mind. If you like CareSaver, you can switch to us here. All you need is your IRD number, passport (or drivers license) and 2 minutes of your time.

Not answered your question?

If you have not found an answer to your question get in touch with us.