KiwiSaver risk reward just 2.1%
That is the finding of Melville Jessup Weaver’s (MJW) latest investment survey, which showed the median annualised return from growth funds was 8.2%, compared to 6.1% for conservative ones.
“[This is] perhaps less than one might have expected at the outset,” it said.
MJW actuary Ben Trollip said over the past five years there had been more difference – growth funds had returned more than 12% per year compared to 6.8% for conservative. Returns from growth assets over that period have been particularly strong.
Trollip said he would expect 2% difference to be “about right” in future years. But that should not deter people with a longer investing timeline from taking more risk, he said. “Even a difference of 2% per year is going to add up. If you have a longer time horizon and can weather some volatility a more aggressive strategy makes sense.”
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