glide path · age-based fund
Lifestages glide path
An investment approach where a fund automatically reduces growth-asset allocation as the investor ages, shifting from Growth-profile in younger years to Conservative-profile near retirement.
A lifestages glide path is an investment approach where a fund (or a series of linked funds) automatically reduces growth-asset allocation as the investor ages. A young investor in their 20s holds a Growth-profile asset mix (around 75–90% growth assets); the allocation glides progressively toward income-asset-heavy mixes through their 40s and 50s; by retirement at 65 the allocation is Conservative-profile (around 20–30% growth assets).
Glide-path funds are most common in the KiwiSaver scheme market (BNZ, Generate, Booster, Westpac and others all operate lifestages variants). In retail managed funds outside KiwiSaver the construction is less common — most retail managed funds offer fixed-risk-profile diversified funds and leave the age-based switching to investor or adviser.
Glide-path mechanics are disclosed in the scheme SIPO: each age band's target asset allocation, the exact ages at which the switch occurs, and whether the switch is automatic or investor-initiated. A glide-path fund is technically a single fund with a moving SAA, not a sequence of separate funds.
Related terms
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multi-asset · multi-sector · balanced
Diversified-multi-asset fund
A fund that holds multiple asset classes in a single product — typically NZ shares, international shares, fixed interest, listed property, and cash — in target asset-allocation ranges.
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SIPO
Statement of Investment Policy and Objectives (SIPO)
The fund-manager document setting out the fund's investment objectives, strategy, asset-allocation ranges, derivative use, hedging, rebalancing and exclusion rules — filed on FMA Disclose and binding on the manager.
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asset-allocation
Asset allocation
The percentage split of a fund's portfolio across asset classes: equities, fixed interest, listed property, cash, alternatives. Drives the fund's risk and return profile more than security selection.