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Research commissioned by the Financial Markets Authority shows large numbers of people who switched to low risk funds at the peak of market volatility have not returned to high growth funds

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Young people dominated the high level of KiwiSaver fund switching during the height of Covid-19 market volatility last year, according to research commissioned by regulator the Financial Markets Authority.

The research, carried out by PwC, found KiwiSaver members aged 26-35 made five times more fund switches than usual, while overall fund switching was three times higher than the normal volume. 

FMA Manager – Investor Capability Gillian Boyes (pictured at right) said it was “concerning” that only 9.1% of people who switched to a lower risk fund from February to April 2020 ‘boomeranged’ back to a high growth fund by August. 

“This meant a large portion of those who left growth funds would now be in a low-risk fund that may not align with their savings goals, especially if they were a long way from retirement,” she said.

PwC compared and analysed fund switching data of 1.5 million KiwiSaver members from seven KiwiSaver providers –…

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