Investing with ASB Investment Funds

ASB Investment Funds offer a range of solutions for New Zealanders looking to grow their wealth over the medium to long term. Whether you are saving for a first home, retirement, or general financial growth, understanding how these managed funds operate is the first step in your investment journey.

What are Managed Funds?

At its core, a managed fund is a pool of money collected from many investors. This pool is managed by professional investment managers who invest the money into various assets, such as shares, bonds, cash, and property. By investing in a fund, you are effectively buying a slice of a diversified portfolio that would be difficult and expensive to assemble on your own.

Types of ASB Investment Funds

ASB provides a selection of funds designed to suit different risk appetites and time horizons. These are generally categorized by their asset allocation:

• Conservative Funds: These focus primarily on income-producing assets like cash and bonds. They aim to provide stable, low-volatility returns, making them suitable for investors with a shorter time frame or a lower tolerance for risk.
• Balanced Funds: These hold a mix of growth assets (like shares) and income assets (like bonds). They are designed for investors looking for a middle ground between growth potential and capital protection.
• Growth Funds: These are heavily weighted toward growth assets. While they come with a higher risk of market volatility, they are designed to achieve higher capital gains over the long term, typically suited for those with a horizon of seven years or more.

Key Benefits

Risk and Return

It is important to remember the golden rule of investing: higher potential returns generally come with higher risk. When selecting an ASB fund, you should consider your personal "risk profile." Ask yourself: how would I react if my balance dropped by 10% in a month? If the answer is significant anxiety, a more conservative fund may be appropriate. If you are comfortable with market fluctuations in exchange for potential long-term growth, a growth-oriented fund might align better with your goals.

Things to Consider Before Investing

Before committing to an investment fund, consider the following factors:

• Time Horizon: How long can you leave your money invested? Generally, money needed within 13 years should not be in high-growth assets.
• Fees: All managed funds charge fees for management and administration. These fees are deducted from the fund's returns, so it is important to understand how they impact your overall growth.
• Market Volatility: Markets go up and down. Investing in funds is a long-term strategy, and it is usually best to avoid reacting impulsively to short-term news or market dips.

Taking the Next Step

If you are interested in ASB Investment Funds, the best approach is to review the Product Disclosure Statement (PDS) available on the ASB website. This document contains detailed information about the fund's objectives, assets, and fee structures. Additionally, consulting with a financial advisor can provide personalized guidance based on your specific financial situation and goals.

Investing is a personal journey. By understanding your options and maintaining a long-term perspective, you can make informed decisions that align with your financial future.