Fund classification could trip up investors: Adviser

Jon-Paul Hale, of Willowgrove Consulting, said the FMA's KiwiSaver Tracker was potentially confusing for users because the way funds are assessed meant that balanced options could sometimes be placed in the same basket as growth or conservative funds.

When he used the tool recently, two bank growth KiwiSaver funds displayed among a comparison of balanced funds.

The FMA said it was because the funds were reported on based on their actual asset allocation, not the target allocation.

Hale said that could mean an investor would choose such a fund thinking it was less risky than other growth funds, then find it returned to its target allocation and became more volatile than expected.