Iran war: Trump’s war hits KiwiSaver balances, investors urged to ‘stay the course’
Friday, 13 March 2026
Sharemarket falls have dragged down KiwiSaver balances since US President Donald Trump launched war on Iran, inflicting losses of hundreds of millions of dollars on savers.
However, so far KiwiSaver fund falls remain relatively modest, in part the result of a weakening of the New Zealand dollar, and KiwiSaver providers are urging investors to hold their nerve and “stay the course”.
Figures from funds research company Morningstar show that from the start of March to March 11, unit prices of the KiwiSaver growth funds it tracks fell by an average of 1.8%.
The average balanced fund it tracked was down 1.61%. The average conservative fund was down 1.81%.
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Since then unit prices listed on KiwiSaver provider websites show a further decline as the world agonises over the price of oil, and just how long they can continue fuelling their economies as the war, which Trump declares is “won” but “not finished yet”, rumbles on.
ANZ’s growth fund was down 2.59% from February 28 to March 13, while its balanced fund was down 2.05%.
Because of the size of KiwiSaver schemes, even modest percentage falls equate to large combined paper losses of hundreds of millions of dollars, though the actual losses for individual savers depend on how much they have saved and which fund they are invested in.
Someone with $10,000 in the average growth fund tracked by Morningstar would have seen their balance fall to $9818 between the start of March and March 11, Morningstar calculated.
At the end of last year, KiwiSavers had about $44 billion in growth funds, $29b in balanced funds, and $9.5b in conservative funds, Morningstar data showed.
ANZ’s growth fund had $5.4b invested in it at the end of December.
On Wednesday, Iran told the world to brace for US$200-a-barrel as it vowed to continue blocking the Strait of Hormuz to oil tankers bound for the US, Israel and its partners, saying they were legitimate targets.
But Rupert Carlyon, founder of the Kōura Wealth KiwiSaver scheme, said even though global markets had recorded falls, they were relatively modest indicating they are pricing in a relatively quick end to the conflict.
“Markets haven’t reacted that badly yet. They are down a couple of percent,” Carlyon said.
That indicated markets were expecting that “Trump will blink the moment markets tell him he has too”, he said.
“That’s clearly what the markets are thinking, or oil would be $200-a-barrel,” Carlyon said.
One scenario was that Trump would declare victory and cease hostilities, even though his stated aim of regime change had not been achieved.
“I would put money on that scenario,” Carlyon said.
People with money in KiwiSaver were in the position of having money riding on just that scenario.
In previous incidents of global economic disruption, KiwiSaver providers saw increases in people switching between types of KiwiSaver funds.
Typically, those moves were people switching from higher-risk growth funds to lower risk balanced and conservative funds.
ANZ, which urged investors to “stay the course”, said compared with the activity during the early days of the Covid pandemic, when many people switched from growth funds to lower-risk funds, switching in response to the economic turmoil caused by Trump’s war on Iran had so far been muted.
KiwiSaver expert Clive Fernandes, chief executive of the Sevaka KiwiSaver services company, said most people in KiwiSaver would be well-advised to “do nothing” as long as they are in the correct fund for their profile and life-stage.
“There may be a war that continues for two weeks, there may be a war that continues for two years, but even if that is the case, you’re still better off doing nothing if you are 30 years from retirement,” he said.
“It’s easy to get out of the market, but when do you get back into the market?
“Most individual investors get out too late, and get back in too late, and have worse outcomes as a result,” he said.
Carlyon said in the past three years there had been four to five times when markets had dropped 10%, and every time they had rebounded.
And, he warned: “When it bounces back, it bounces very quickly.”
And, Carlyon warned: “If you trade every time Trump blinks, it’s a recipe for disaster.”
ASB chief investment officer Frank Jasper said looking back through recent history, the average market fall following the start of military conflicts was around 5%.
However, the average time it took those markets to recover was just 47 days.
Jasper said headlines might lead people with money in KiwiSaver to expect larger falls to have taken place in the value of their investments than had occurred.
He said markets tended to “look through” conflicts, though it was possible the US-Iran conflict could get worse.
Though investors in higher risk funds like growth funds would experience more volatility during their investing, over the long term they were “paid for taking that risk” with higher long-term returns.
In a message to its KiwiSaver customers, Westpac said: “While market volatility can be quite the ride for your KiwiSaver balance, it's important to remember that ups and downs are a normal part of investing.
“We know many people are feeling concerned about the conflict in the Middle East,” it continued.
“It's unclear how long this conflict will last but we are already seeing disruption to shipping, air travel and oil supplies. Rising energy prices can be a driver of how shares, bonds and currencies are traded and as a result you could see your KiwiSaver balance going up and down from day to day.”
However, it said: “History shows however, that over time share markets recover, so it's important not to panic.”
And, it said: “When the market dips and your balance goes down you haven't 'lost' money unless you choose to sell your investment or withdraw your funds.”
In fact, it said: “If you can keep contributing at times like this, your contributions could buy more at a lower price, providing an upside in a future market recovery.”
Carlyon said that was an opportunity for people to take a calculated bet by increasing their KiwiSaver contributions, enabling their KiwiSaver fund to buy more shares on their behalf at lower prices.