Many New Zealanders hold bonds through their investment in KiwiSaver funds, a fact that not all such investors are aware of. More alarmingly, only slightly more than half of KiwiSaver investors know the interest rates and maturity of the bonds held in their accounts, with many simply assuming that bonds were fail-safe in ensuring that investors would get their money back. As global rates continue to rise, bond values will fall, causing negative returns for funds thought to be conservative and protective towards investments. The key is to be prepared and not to be surprised or take hasty action when this happens.
