Posted 11 March 2025

You may have noticed your UniSaver account balance has fallen in recent weeks, especially if you are invested in an option with a significant allocation to growth assets like shares. The S&P500 index, which tracks the performance of the 500 largest U.S. companies, has continued to slide since reaching an all-time high on 19 February. All eyes are on the U.S. and President Trump’s on-again-off-again approach to implementing tariffs against its three largest trading partners: Canada, Mexico and China. Share prices are generally retreating as investors consider a range of possible consequences including an uptick in inflation, a slowdown in the rate of planned interest rate cuts, and even the prospect of the U.S. economy being tipped into a recession. Market sentiment shifts quickly, which means any comment about the current state of play is soon outdated. For this reason, you might be interested to follow the weekly market updates provided by our investment consultant and manager, Russell Investments (see link below).

Remember, volatility is to be expected with growth assets. Options like Growth have performed well over the past two years, but with the potential for growth in value comes a greater risk of occasional losses in value. Past returns are not an indicator of future returns, and this is true in the short term as it is in the long term. When markets fall sharply as they have now, it’s natural to want to take action by moving to a more conservative fund. The danger with that approach is that you ‘lock in’ the losses and miss out on the market recovery when it comes. Short-term events shouldn’t change your long-term approach. 

However, if you need to access your funds in the short term, you may not want to risk your balance falling further if markets continue to fall. Unfortunately, all investment involves an element of risk and none of us knows what is around the corner. That’s why we recommend you stick to an investment strategy based on your personal circumstances – which may mean taking a conservative approach if you are nearing retirement or need access to your savings. 

Given recent events, it might be a good time to start thinking about your investment ‘personality’ and what level of risk you are truly comfortable with. Our risk profiler is a good place to start to work out whether you’re in the right investment option for your investment timeframe. It might help identify that a change in strategy is appropriate at some point in the future. It might also help you reassure yourself that your current strategy is the right one. 

Russell Investments’ updates

Follow the latest updates from our investment consultant and manager here:

• Russell Investments’ blog [external link]