Stick with your savings plan
A ‘unit price’ reflects the value of a fund. A fund’s unit price may move up or down as the value of its investments change. For example, a fund might be invested in shares in a company, and when the value of those shares drops, this is reflected in a lower unit price.
When you contribute money to your KiwiSaver, that money is used to purchase units in a fund or funds. When markets drop, as they have done recently, the value of the units your KiwiSaver is invested in decrease as well, and this has an impact on your savings.
The good news is, if you’re regularly contributing to KiwiSaver, you’re able to benefit from market movements by continuing to buy units at discount prices. When markets recover, those units will be worth more, and your KiwiSaver can grow faster.
If you are thinking about changing funds, it’s important to understand that the process involves selling all your units in your current fund and buying units in another. The process can take several days, and the price you pay is what the units are valued at by the end of this period. If markets move while you are changing funds, this can have an impact on your balance, so it’s important to avoid making a hasty decision and stick to your long-term savings plan.