The pandemic has exposed the perils of playing the stock market, leaving some KiwiSavers the poorer.
ASB's latest report on its KiwiSaver funds indicates sharemarket volatility has got the better of some of its customers this year, with 6 percent switching to lower risk cash and conservative funds in March as Covid-19 saw sharemarkets plunge.
Senior bank economist Chris Tennent-Brown said many of those investors missed out on the rapid recovery that occurred from April onwards.
"The experience may have convinced some customers that higher risk funds are not for them, but many others have not made a decision about what to do, and are still on the sidelines in the cash or conservative funds."
He said customers were understandably unsettled by watching their fund balances drop significantly in March, given ASB's diversified KiwiSaver funds recorded the best calendar year returns ever in 2019.
"However this also demonstrates the importance of customers being clear about their investment goals and timeframes, and sticking to them."
Tennent-Brown said while some people switched out of their funds, others stopped saving or held back on making investment decisions, and were still confused about what to do.
He said it was important to keep contributing through volatility, noting that voluntary lump sum contributions to its plans dropped significantly during March and were yet to return to pre-Covid levels.
"It's understandable if people stop saving to manage cashflow in times like this, but for those that can afford it, it's useful to think about getting more for your money when prices are low."
Despite the challenges of the year, he said a record 27 percent of survey respondents ranked their knowledge and understanding of KiwiSaver as high, up from 22 percent a year ago.
The lift coincided with an increase in the number of times people checked their KiwiSaver balance, with 38 percent of respondents saying they checked fortnightly or more, compared with 35 percent last quarter and 31 percent in the first quarter of the year.
"The improvement is pleasing, but there is still a long way to go.
"A significant number of people still describe their knowledge of KiwiSaver as poor, and as we saw around March, a significant number of people aren't sure what to do when markets get volatile.
"What's most pleasing to see over recent months has been the recovery in balances for people that stuck with their strategies and kept on making their regular contributions."