Lower band on the FMA scale
Risk indicator 2 — NZ managed funds
Funds with the FMA standardised risk indicator of 2 sit at the second-lowest band on the 7-point scale. The indicator is calculated from the past five years of unit-price volatility and is published in every Quarterly Fund Update on the FMA Disclose register.
NZ funds at band 2 in our coverage are typically conservative diversified funds (heavy cash + bond mix) or longer-duration NZ fixed-interest portfolios. 2022 was a reminder that even band-2 funds can post negative annual returns when the RBNZ raises rates sharply.
9 of 284 tracked funds with on-file FMA risk indicator. Data from Sorted Smart Investor (sourced from FMA Disclose Quarterly Fund Updates).
- Simplicity NZ Cash FundSimplicity · CashPIE · capped at PIR (max 28%) conservative0.12% fee 2/7 risk
- Dimensional Two-Year Sustainability Fixed Interest PIE FundDimensional · International FIPIE · capped at PIR (max 28%) NZD hedged Responsible / ethical0.25% fee 2/7 risk
- Lifetime Cash FundLifetime · CashPIE · capped at PIR (max 28%) conservative0.65% fee 2/7 risk
- Coolabah Short Term Income PIE FundCoolabah · International FIPIE · capped at PIR (max 28%) conservative0.67% fee 2/7 risk
- Mercer Macquarie NZ Short Duration FundMercer · NZ Fixed InterestPIE · capped at PIR (max 28%)0.68% fee 2/7 risk
- Hunter Private Credit FundHunter · International FIPIE · capped at PIR (max 28%) balanced0.83% fee 2/7 risk
- Coolabah Global Floating-Rate High Yield PIE FundCoolabah · International FIPIE · capped at PIR (max 28%) balanced1.00% fee 2/7 risk
- Squirrel Monthly Income FundSquirrel · OtherPIE · capped at PIR (max 28%)2.14% fee 2/7 risk
- Artesian Short Duration Corporate Bond Fund (NZD)Artesian · International FIPIE · capped at PIR (max 28%) conservative2/7 risk
Other risk bands
How the FMA risk indicator is calculated
The standardised risk indicator is published on every NZ fund's Product Disclosure Statement and Quarterly Fund Update. It is calculated from the standard deviation of the fund's monthly returns over the past five years, then mapped to a 1–7 band per the FMA's Risk Indicators for Managed Investment Schemes framework.
It is backward-looking — a band-4 fund today may move to band 5 next quarter if recent volatility increases. It also doesn't capture every kind of risk: a fund holding a single illiquid asset can have low historical volatility (giving a low band) while carrying material liquidity risk that the indicator doesn't reflect.
Cross-validate via the per-fund page which links to the source Quarterly Fund Update on the FMA Disclose register.
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