Before you choose your investment strategy you should find out what type of investor you are by taking our investor profiler. It's important to know what your tolerance to risk is and how you feel about your investment fluctuating in value.

How to find the right balance of investment risk and return?

For a little word, 'risk' can pack quite a punch. It can often be the thing that puts people off investing. But it doesn't need to. When we use the term 'risk' in the investment world, we are referring to the extent to which returns will vary over time.

Generally, if the investment return over the short-term is fairly predictable, the investment is said to be of lower risk. While if the return has a greater potential to move up and down over the short-term, the investment is said to be of higher risk.

Investors may choose higher risk investments because historically the returns on higher risk investments in managed funds have been greater over the long-term than lower risk investments. What's important is that you find a level of risk that you're comfortable with so that your savings can grow without giving you any undue worry.

Income or growth assets?

The proportion of your Investment Fund that is invested in income assets versus growth assets determines the level of risk that investment has.

• Income assets (cash and fixed interest such as bank deposits and government bonds) are lower risk investment types that primarily generate a regular income.
• Growth assets (shares and property) are higher risk investment types that have the potential over time to increase in capital value and deliver higher returns to investors.

The table below shows the proportion of income and growth assets of each Investment Fund:

Investment Fund	Income Assets	Growth Assets
NZ Cash Fund	100%	0%
Tracker Conservative Fund	80%	20%
Active Conservative Fund	70%	30%
Tracker Moderate Fund	60%	40%
Tracker Balanced Fund	40%	60%
Active Balanced Fund	40%	60%
Tracker Growth Fund	20%	80%
Active Growth Fund	20%	80%
Active High Growth Fund	0%	100%
Global Sustainability Fund	0%	100%

The proportion of income and growth assets determines the level of risk that Investment Fund has - for example an Investment Fund with a high proportion of income assets has a lower level of risk than one with a high proportion of growth assets.

Important
A reference to an Investment Fund investing in assets or asset classes refers to an Investment Fund investing in those assets or asset classes either directly or indirectly, including through managed funds.

It is important to note that the investment returns for Investment Funds in FirstChoice KiwiSaver will fluctuate up or down from one period to the next, and may be negative. Investment returns are not guaranteed in any respect.

Investment time horizons

When we refer to investment time frames of short, medium or long-term, we mean:

• Short-term - periods of up to five years
• Medium-term - periods of five to ten years
• Long-term - periods of more than ten years.

First home buyers (or second-chance home buyers)

If you intend to use your KiwiSaver savings to help you buy your first home (or you are a second-chance home buyer), you may wish to consider investing in one of the more conservative Investment Funds, such as the NZ Cash Fund (the most conservative of the Investment Funds offered in FirstChoice KiwiSaver). If you decide this is your investment strategy there's no need for you to complete the investor profiler.

Don't want to choose?

If you prefer not to choose an Investment Fund, your savings will be invested into the Tracker Conservative Fund. Even if you don't make a choice initially, you can always change your mind later and ask us to change your investment to one or more of our other Investment Funds in FirstChoice KiwiSaver.

How to choose your investment strategy

Before you can choose your investment strategy you need to know what type of investor you are. This is really important since everybody sees things a little differently when it comes to investments. If an investment going up and down in value is likely to keep you awake at night, it is unlikely to be the right one for you.

So you need understand how you feel about the balance between how much investments may fluctuate (called investment risk) and the potential returns you might expect. Simply complete the questionnaire to find out your investor profile. We can then help you match your investor profile to an Investment Fund in FirstChoice KiwiSaver that best suits your needs. Remember, there are no right or wrong answers; just choose the answer that best describes how you feel.

Important
This profile should not be your only source of information and advice when you are making investment decisions. It should be treated as a guide only and is not a personal investment or financial plan. You may wish to seek advice from a financial adviser.

Disclaimer

A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme ("FirstChoice KiwiSaver") is available here or by calling 0800 1ST CHOICE (0800 178 246).