What Are Growth and Income Assets in a KiwiSaver Fund? (NZ 2026)

Growth assets vs income assets is the split that defines your KiwiSaver fund type and risk. Here is what each bucket holds, where shares, property, bonds and cash sit, and how to read your fund's mix.

Every KiwiSaver fund is built from two ingredients: growth assets and income assets. The proportion between them is the single most important thing that sets your fund's risk and likely return — more than the provider's name or the label on the fund. Yet most people have never seen their own split, even though it is published every quarter. This guide explains what each bucket holds, how the split defines your fund type, and how to find and read your own mix.

TL;DR: Growth assets (shares and property) carry higher risk and higher expected returns; income assets (cash and bonds) are steadier but lower returning ¹⁴. The percentage in growth assets defines your fund type, from defensive (0–9.9%) through to aggressive (90–100%) ². A growth fund typically sits around 70% growth / 30% income ³. You can find your own split in your provider's quarterly fund update ⁵.

What are growth assets in a KiwiSaver fund?

Growth assets are the parts of your fund expected to grow in value over time, mainly through rising prices rather than steady interest. The main growth assets are shares (also called equities) — both New Zealand and international — and listed property. Some funds also hold infrastructure and a small slice of private equity ⁴.

The trade-off is movement. Growth assets fluctuate more in value: they can rise strongly over a good run and fall sharply in a bad year, sometimes 20% or more, before recovering. The reason people hold them anyway is that, over long periods, this higher risk has historically come with higher expected returns ¹⁴. They are the engine of a long-term KiwiSaver balance, but they are also the reason a statement can drop in any given quarter.

A useful way to think about it: growth assets reward patience and punish panic. Over a decade or three they tend to outperform income assets, but only for people who can stay invested through the dips along the way.

What are income assets in a KiwiSaver fund?

Income assets are the steadier part of your fund. They are investments such as cash, term deposits and bonds (also called fixed interest), which pay a specified, relatively stable rate of return ⁴. A bond is essentially a loan to a government or company that pays regular interest and returns the capital at the end of its term. Cash includes bank deposits and short-term, low-risk holdings.

Income assets move far less than growth assets. That stability is the point — they cushion a fund against sharp falls and provide a more predictable return. The cost of that smoother ride is a lower expected return over the long run. They are not entirely risk-free either; bond values can fall when interest rates rise, as many KiwiSaver members saw in 2022. But compared with shares, the swings are much smaller.

In short, income assets are about protecting value and dampening volatility; growth assets are about building value over time. Almost every KiwiSaver fund holds some of each — the difference between funds is how much of each.

How does the growth/income split define your fund type?

KiwiSaver funds are classified along a spectrum from defensive to aggressive, based purely on the proportion of growth assets they hold ¹. Sorted (run by the Retirement Commission) and the FMA use five standard categories, with these growth-asset bands ²:

Growth-asset bands per the FMA and Sorted fund categories ¹². The income-asset column is simply the remainder.

This is why two funds with very different names can behave similarly, and two with the same name can behave differently. A fund is "balanced" because 35–62.9% of it sits in growth assets — not because of anything in the brochure. When you compare funds, the growth-asset percentage tells you far more than the label.

Here is roughly how that split looks across the five categories. A growth fund commonly targets around 70% growth / 30% income ³, while a conservative fund commonly targets around 20% growth / 80% income ⁹:

Figure: Growth vs income split across the five fund categories (illustrative, based on Sorted fund categories) ``` Defensive ▓▓ growth 5% ░░░░░░░░░░░░░░░░░░ income 95% Conservative ▓▓▓▓ growth 20% ░░░░░░░░░░░░░░░░ income 80% Balanced ▓▓▓▓▓▓▓▓▓ growth 50% ░░░░░░░░░ income 50% Growth ▓▓▓▓▓▓▓▓▓▓▓▓▓ growth 70% ░░░░░ income 30% Aggressive ▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓ growth 95% ░ income 5% ``` Illustrative mid-band figures only, not the holdings of any specific fund. Actual splits vary by provider — check the fund update ⁵.

For a fuller walk-through of each category, see our guide to KiwiSaver fund types explained.

Where do shares, property, bonds and cash sit in the split?

It helps to know which side of the line each common holding falls on. Growth and income are umbrella terms, and inside each sit several asset classes ⁴:

A few things often surprise people. Listed property sits on the growth side, not income — even though it pays rent — because its capital value moves like shares. Bonds sit on the income side even though their prices can wobble, because their main job is a predictable interest stream. And cash, while the safest holding, is an income asset with the lowest long-run return, which is why a fund that is mostly cash is not "safe" for a 30-year goal — it can quietly fall behind inflation. For a closer look at the underlying holdings, see what your KiwiSaver fund actually holds.

Why can the same split carry different real-world risk?

A 70/30 growth fund at one provider is not identical to a 70/30 growth fund at another, even though the headline split matches. The growth-asset percentage tells you the shape of the risk, but not every detail of it ⁴.

Two funds with the same split can differ in:

• What sits inside the growth bucket. One fund's 70% might be spread across thousands of global companies; another's might lean heavily on a single market or a handful of large holdings. More concentration means more risk for the same headline split.
• Currency hedging. International shares can be hedged back to the NZ dollar or left unhedged. That choice changes how much your balance moves when the dollar does, without changing the growth/income split at all.
• Active versus passive management. Two funds can hold the same broad mix but run it very differently, with different costs and different odds of beating or trailing the market.
• The quality of the income side. Bonds range from very safe government issues to riskier corporate debt. A "30% income" sleeve made of high-risk bonds behaves differently from one made of government bonds.

So the split is the starting point, not the finish line. It puts a fund in the right ballpark for risk; the detail inside each bucket fine-tunes it.

How does the split change your expected return and volatility?

The growth/income split is the main lever on two things: how much your balance is expected to grow over the long run, and how much it bounces around along the way. More growth assets generally means a higher expected long-run return and larger short-term swings; more income assets means the reverse ¹⁴.

This matters because volatility and timeframe interact. For money you will not touch for decades, short-term swings are noise — what counts is the long-run return, and a higher growth allocation has historically delivered more of it. For money you need soon, those same swings are a real danger, because a dip might land exactly when you need to withdraw.

The risk many people miss is the quiet one. A fund that is too heavily in income assets feels safe on a statement, but for a long-term goal it can under-shoot what you could have had — the return is steadier but lower, and over 20 or 30 years that gap compounds. Being too cautious for your timeframe is a risk in its own right, just a less visible one than a market dip. Your fund's risk profile should match your life stage, not just your nerves.

How do you read your fund's growth/income percentage?

You do not have to guess your split — it is disclosed by law. Every KiwiSaver provider must publish a quarterly fund update for each fund, showing its actual asset allocation, including the breakdown between growth and income assets ⁵. This lets you see and compare a fund's real growth/income percentage rather than relying on the name.

To find yours:

1. Open your fund's latest quarterly fund update. It is on your provider's website, usually under "documents", "fund updates" or "performance". You can also search the Companies Office Disclose Register.

2. Find the asset allocation section. It lists each asset class and the percentage in each — for example NZ shares, international shares, listed property, bonds and cash.

3. Add up the growth side. Shares, listed property, infrastructure and private equity are growth. Cash, term deposits and bonds are income ⁴. The two should total roughly 100%.

4. Compare that figure to the band you expected. If your "growth" fund is sitting at 50% growth assets, or your "conservative" fund at 45%, the label and the reality may not line up.

5. Check it against your timeframe and goals, not against last year's returns.

A quick way to start is our free KiwiSaver health check, which shows the band you are actually in.

How do you choose a split that matches your timeframe?

The split is less about how adventurous you feel and more about three concrete questions: when do you need the money, how would you cope with a 20% paper drop, and what is the money for? Timeframe usually does most of the work — money you will spend soon belongs nearer the income end; money you will not touch for decades can carry more growth ¹⁹.

A rough starting guide, which an adviser would then tailor:

One person can run more than one timeframe at once — a deposit in two years and retirement in thirty — and those goals may not belong in the same fund. The settings around your KiwiSaver also keep moving: the minimum employee and employer contribution rate was 3% as at 1 April 2025, rising to 3.5% from 1 April 2026 and 4% from 1 April 2028 ⁸, and the maximum annual government contribution was halved from $521.43 to $260.72 from 1 July 2025 (now 25c per $1, on a personal contribution of at least $1,042.86) ⁶⁷. Your split decides how hard those dollars work once they land.

Because Smiths Financial is independent and holds no in-house product, we compare funds from providers like Simplicity, Booster, Milford, Generate, Fisher Funds and Kernel on the same footing — the right split at the right fee, not a house fund.

Frequently asked questions

What is the difference between growth assets and income assets in KiwiSaver? Growth assets are shares, listed property, infrastructure and private equity — they fluctuate more in value but have higher long-term return potential. Income assets are cash, term deposits and bonds, which pay a more stable return but grow less over time ⁴. The mix between them sets a fund's risk and likely return.

What is a good growth/income split for KiwiSaver? There is no single right answer — it depends on your timeframe and how you would handle a market dip. As a general guide, money you need within a few years suits more income assets, while money for retirement decades away can carry more growth ¹⁹. A growth fund commonly targets around 70% growth / 30% income, and a conservative fund around 20% growth / 80% income ³⁹.

Is listed property a growth or income asset? Listed property is classed as a growth asset, even though it pays rent, because its capital value moves more like shares than like bonds ⁴.

Where can I find my KiwiSaver fund's growth/income split? In your fund's quarterly fund update, which every provider must publish by law. It shows the actual asset allocation, including the growth/income breakdown, on the provider's website or the Companies Office Disclose Register ⁵.

Does the same split always mean the same risk? Not exactly. Two funds with the same growth/income split can differ in what sits inside each bucket — how concentrated the shares are, whether overseas holdings are currency-hedged, and how risky the bonds are. The split sets the ballpark; the detail fine-tunes it ⁴.

Are income assets risk-free? No. Income assets are steadier than growth assets, but bond values can fall when interest rates rise, and cash can lose ground to inflation over time. They reduce volatility rather than remove risk entirely ⁴.

General information, not personalised financial advice. It does not take into account your particular financial situation, goals or needs; before acting, consider whether it is right for you and seek advice tailored to your circumstances. Returns are not guaranteed — the value of investments can go down as well as up, and past performance is not a reliable indicator of future performance. KiwiSaver is a long-term savings scheme; government contributions, contribution rates and tax settings are set by the Government and can change. Figures are correct as at 1 April 2025 — check current rules at ird.govt.nz, kiwisaver.govt.nz and sorted.org.nz, and the relevant scheme's Product Disclosure Statement. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 1 April 2025.