Types of Investment Funds Beyond KiwiSaver: A Deeper Dive
KiwiSaver is just one way to invest in New Zealand. From managed funds and ETFs to PIE funds and unit trusts, explore the full range of investment funds available to Kiwi investors — and how they fit alongside your retirement planning strategy.
Understanding the Landscape: What Are Investment Funds in NZ?
An investment fund is a pooled vehicle that collects money from multiple investors and uses it to purchase a diversified portfolio of assets — such as shares, bonds, property, or cash. In New Zealand, investment funds are regulated by the Financial Markets Authority (FMA) and come in many forms, each with its own structure, fee model, and strategy.
While KiwiSaver is the best-known investment fund structure for most Kiwis — see our guide to KiwiSaver investment funds — it represents just one slice of the broader market. Outside KiwiSaver, you can access managed funds, exchange-traded funds (ETFs), index funds, PIE funds, unit trusts, and sector-specific options — each offering different benefits for your financial goals.
Understanding these types of investment funds in NZ is critical for building a well-rounded portfolio. Financial advisers frequently recommend diversifying across multiple fund types rather than relying solely on KiwiSaver, particularly for investors who want flexibility around withdrawals and contribution amounts.
Investment Fund Types at a Glance
Managed Funds
Professionally managed, pooled investments across diversified assets.
ETFs & Index Funds
Low-cost, passively managed funds that track market indices.
PIE Funds
Tax-efficient structures with capped investor tax rates.
Specialised & Property Funds
Targeted sector exposure for specific investment goals.
Beyond KiwiSaver: Exploring Managed Funds in New Zealand
Managed funds are the most common type of investment fund outside KiwiSaver. They pool capital from multiple investors and employ professional fund managers to make investment decisions on your behalf.
How Managed Funds Work
ActiveWhen you invest in a managed fund, your money joins a pool with other investors. A professional fund manager — regulated by the FMA — selects and monitors a portfolio of assets, making buy and sell decisions based on the fund's strategy and market conditions.
Unlike KiwiSaver, managed investment funds typically have no lock-in period. You can withdraw your money at any time, though some funds may charge early exit fees or require minimum holding periods. This flexibility makes them valuable for retirement planning alongside KiwiSaver.
Managed funds in NZ are available from providers like Fisher Funds, Milford, Harbour Asset Management, and many others. They cover growth, balanced, conservative, and income-focused strategies — similar to the categories you find within KiwiSaver.
Key Features
FlexibleNo lock-in period
Access your money when you need it — unlike KiwiSaver, which locks funds until age 65 (or first home withdrawal).
Professional management
Experienced fund managers research and select investments, adjusting the portfolio in response to market changes.
Diversified investment options
Choose from hundreds of funds spanning local and international equities, fixed interest, property, and multi-asset strategies.
Employer contributions & KiwiSaver
Managed funds complement KiwiSaver. While employer contributions flow into your KiwiSaver account, additional savings can grow in separate managed funds.
KiwiSaver + managed funds = a stronger strategy
Many financial advisers recommend holding investment funds beyond KiwiSaver to give yourself flexibility. KiwiSaver provides tax credits and employer matching, but managed funds provide liquidity and broader investment choices for goals before retirement — like saving for a car, education, or building an emergency fund.
managed funds in NZ
Passive vs. Active: Index Funds and ETFs as Investment Funds in NZ
Passive investment funds have surged in popularity among New Zealand investors. Rather than relying on a fund manager to pick individual stocks, index funds and ETFs simply track a benchmark index — such as the S&P/NZX 50, the S&P 500, or the MSCI World Index — replicating its holdings automatically.
ETFs (exchange-traded funds) are listed on the NZX and can be bought and sold throughout the trading day, just like ordinary shares. Index funds, by contrast, are typically unlisted managed funds that process transactions at the end of each business day. Both aim to match — not beat — the market, which keeps management fees significantly lower.
The New Zealand Superannuation Fund (often called the Cullen Fund) uses a similar passive indexing approach for a substantial portion of its $70+ billion portfolio, demonstrating that even large-scale institutional investors rely on these strategies. For everyday Kiwis, ETFs in New Zealand offer a simple, low-cost entry point into global markets.
Active vs. Passive Comparison
Fees
ETFs/index funds: typically 0.1%–0.5% p.a. Active managed funds: typically 0.8%–1.5% p.a.
Returns
Passive funds match the index. Active managers aim to outperform but the majority underperform over 10+ year periods after fees.
Trading
ETFs trade intraday on the NZX. Index fund orders are processed end-of-day. Active funds settle at the next unit price.
Transparency
ETFs disclose all holdings daily. Active fund managers may only disclose quarterly, and some use proprietary strategies.
Specialised Investment Funds NZ: Property, Ethical, and Sector-Specific Options
Beyond broad market funds, New Zealand investors can access specialised investment funds that target specific sectors, themes, or values-based strategies — offering exposure that standard KiwiSaver funds may not provide.
Property Funds
Property investment funds hold commercial, industrial, or retail real estate assets. They provide exposure to the property market without requiring you to buy a building yourself. For first home buyers still saving a deposit, property funds offer a way to participate in real estate growth while building capital.
Listed property trusts (REITs) on the NZX, such as Kiwi Property Group, provide liquid access to large-scale property portfolios.
Ethical & ESG Funds
Ethical investment funds apply environmental, social, and governance (ESG) screening criteria to exclude companies involved in fossil fuels, weapons, gambling, and other activities. Providers like Pathfinder, Mindful Money, and Simplicity offer dedicated ethical options.
Learn more about values-based strategies in our guide to ethical investing in KiwiSaver.
Sector-Specific Funds
Sector funds concentrate on a single industry — technology, healthcare, infrastructure, or Australasian equities. While they carry more concentrated risk than diversified investment funds, they allow investors to overweight areas they believe will outperform.
These funds are best used as a complement to a broadly diversified core portfolio, rather than as a standalone investment.
Understand fund risk before investing
Specialised investment funds can be more volatile than diversified options. Before concentrating your portfolio in a single sector, make sure you understand the risks involved. Our guide to understanding fund risk explains how to evaluate your tolerance and match it to the right fund type.
Unit Trusts and PIEs: Understanding Popular Investment Fund Structures in NZ
When exploring investment funds in New Zealand, you will encounter two common structures: unit trusts and Portfolio Investment Entities (PIEs). These are not separate fund types in themselves — rather, they describe the legal and tax framework under which a fund operates.
A unit trust is a pooled investment vehicle where investors hold units representing their proportional share of the fund's assets. When the fund's underlying investments grow in value, so does the value of your units. Most managed funds and KiwiSaver schemes in New Zealand are structured as unit trusts governed by a trust deed and overseen by an independent supervisor.
A PIE (Portfolio Investment Entity) is a fund that elects for special tax treatment from the Inland Revenue Department (IRD). Investors in a PIE are taxed at their Prescribed Investor Rate (PIR) — capped at 28%, which is lower than the top personal income tax rate of 39%. This makes PIE funds particularly attractive for higher-income earners. Most KiwiSaver funds are structured as PIEs, which is one reason they receive favourable tax treatment alongside Member Tax Credits.
PIE Tax Advantage
Tax comparison on $10,000 investment income
Prescribed Investor Rates (PIR)
Key point: The IRD does not tax PIE income separately — it's already taxed at your PIR within the fund, so you don't need to include it in your personal tax return.
Choosing the Right Investment Funds in NZ: Key Considerations
Selecting the right investment funds depends on your personal circumstances — your age, income, savings goals, risk tolerance, and when you need access to the money. There is no single best fund; the right choice balances your growth ambitions with your comfort level during market downturns.
For most New Zealanders, an effective strategy combines KiwiSaver for long-term retirement planning with separate investment funds for medium-term goals. This dual approach maximises the benefits of employer contributions and Member Tax Credits within KiwiSaver, while giving you liquid, accessible savings outside the scheme.
Define your investment timeline
Short-term goals (1–3 years) suit conservative or cash funds. Long-term goals (10+ years) can tolerate more growth-oriented investment funds with higher volatility.
Compare fees carefully
A 1% difference in annual fees can reduce your final balance by tens of thousands of dollars over 30 years. Use our fund directory to compare fee structures.
Assess your risk tolerance
Be honest about how you would react to a 20% market drop. Our guide to fund risk helps you understand different risk levels and match them to your comfort zone.
Diversify across fund types
Explore the full range of types of investment funds available. Combining KiwiSaver with ETFs, managed funds, or PIE funds creates a more resilient portfolio.
Get Personalised Guidance from a Financial Adviser
Navigating the range of investment funds in New Zealand can be challenging. An FMA-licensed financial adviser can analyse your full financial picture and recommend a combination of KiwiSaver and non-KiwiSaver funds tailored to your goals, timeline, and risk appetite.
Advisers are required under the Financial Services Legislation Amendment Act (FSLAA) to act in your best interests — giving you confidence that their recommendations are focused on your outcomes, not their fees.
Find an AdviserRelated Reading
KiwiSaver Fund Types
Explore growth, balanced, conservative, lifecycle, and ethical fund categories within KiwiSaver.
Evaluating Fund Performance
Learn how to assess and compare fund returns, benchmarks, and risk-adjusted performance.
Understanding Fund Fees
Compare management fees, admin charges, and the long-term impact of fees on your investment returns.
Investment Fund Types in New Zealand
A quick reference to the main types of investment funds available to Kiwi investors — whether you are looking to complement your KiwiSaver or build a standalone portfolio.
Managed Funds
Professionally managed pooled investment funds where a fund manager selects and monitors investments on your behalf across diversified asset classes.
Exchange-Traded Funds (ETFs)
Listed on the NZX, ETFs track market indices and offer low fees, high transparency, and the ability to trade throughout the day like ordinary shares.
Index Funds
Passively managed funds that replicate a specific market index, such as the S&P/NZX 50 or MSCI World, at a fraction of the cost of active management.
PIE Funds
Portfolio Investment Entities that offer tax-efficient returns with a capped rate of 28% — below the top personal tax rate of 39% for eligible investors.
Unit Trusts
Traditional pooled investment structures where investors hold units representing their share. Many NZ managed funds and KiwiSaver schemes use this structure.
Property & Sector Funds
Specialised funds focused on specific sectors such as commercial property, technology, healthcare, or Australasian equities for targeted exposure.
Frequently Asked Questions
Quick answers to the most common questions about investment fund types in New Zealand.
What types of investment funds are available in New Zealand outside KiwiSaver?
Beyond KiwiSaver, New Zealanders can invest in managed funds, exchange-traded funds (ETFs), index funds, unit trusts, and Portfolio Investment Entity (PIE) funds. Each offers different fee structures, liquidity, and management styles. Many of these funds invest in the same underlying assets as KiwiSaver funds — shares, bonds, property, and cash — but with greater flexibility around withdrawals and contribution amounts.
What is the difference between a managed fund and an ETF in New Zealand?
Managed funds pool investor money and are actively managed by professional fund managers who select investments on your behalf. ETFs (exchange-traded funds) are listed on a stock exchange like the NZX and typically track an index passively. ETFs generally have lower fees than actively managed funds and can be bought or sold throughout the trading day, whereas managed fund transactions are processed at the end of each business day.
What is a PIE fund and how is it taxed?
A Portfolio Investment Entity (PIE) is a type of fund structure in New Zealand that receives special tax treatment from the Inland Revenue Department (IRD). PIE investors are taxed at their Prescribed Investor Rate (PIR), which is capped at 28% — lower than the top personal income tax rate of 39%. This makes PIE funds a tax-efficient option for higher-income earners. Most KiwiSaver funds are structured as PIEs.
Can I invest in funds beyond KiwiSaver while still being a KiwiSaver member?
Yes. KiwiSaver membership does not prevent you from investing in other funds. Many New Zealanders hold both a KiwiSaver account and separate managed fund or ETF investments. Diversifying across multiple investment vehicles can complement your retirement planning strategy and provide access to your money before age 65, since non-KiwiSaver funds generally have no lock-in period.
Ready to Explore Your Investment Options?
Compare KiwiSaver funds, analyse fees and returns, and find the right combination of investment funds for your goals.