ANZ KiwiSaver Scheme Balanced Fund

Performance is after the annual fund charge and before tax. Rates, fees and agreements.

• It was a good quarter for investment markets across the board, with both share and bond markets finishing higher. The main driver was lower government bond yields, due to signs of a continued easing in inflationary pressures, which suggests the world’s central banks are finished with interest rate hikes.
• US share markets were some of the best-performing, with the S&P 500 rising 11.7% and the NASDAQ 100 up 13.8%. Most of the major sectors finished higher, with information technology and real estate two of the standout performers, while energy fell given the decline in oil prices over the quarter. 
• Most other markets took their lead from the US. In Europe, the Euro Stoxx 50 Index was 8.6% higher and Japan’s Nikkei 225 Index gained 5.2% as its market hit a new 33-year high in November. Closer to home, the NZX 50 delivered a 4.2% return as the prospect of further interest rate hikes remained. 
• In fixed interest markets, global bonds had one of their best quarters on record as the likelihood grew that the next move by many central banks will be to cut rates (bond prices rise as interest rates fall). 
• New Zealand bonds also delivered strong gains over the quarter, with yields dropping to multi-month lows. Despite this, at its November meeting, the Reserve Bank of New Zealand (RBNZ) raised the neutral rate (the rate at which it expects the OCR to peak) to 5.69%. This implies a further 25-basis-point hike is likely. However, these expectations were tempered by news the domestic economy shrank in the third quarter – well below forecasts, including those of the RBNZ. 
• Against the backdrop of an impressive quarter for fixed interest, it was no surprise that our international bond managers contributed to relative performance, while at a tactical level our overweight to both domestic and international bonds continues to add to performance. 
• Meanwhile, the strong showing from global shares over the quarter, especially growth stocks, meant the fund’s allocation to this asset class was another contributor to fund performance.  
• We remain underweight to international shares, and overweight to domestic and international fixed interest. This reflects our belief that the global economy will start to slow in the coming months, dragged down by the flow-on effect of higher interest rates. We expect labour markets to soften and slow consumption, which will eventually weigh on economic growth. Our base case is that we will see a mild recession in the US in 2024.

The fund aims to achieve (after the fund charge and before tax) over the long term moderate returns, allowing for moderate ups and downs in value.

The graph below shows the value of a $1,000 investment made at the time the fund launched.

Performance is after the annual fund charge and before tax. Rates, fees and agreements.

The fund invests in similar amounts of income assets (cash and cash equivalents and fixed interest) and growth assets (equities, listed property and listed infrastructue). The fund may also invest in alternative assets.

This chart shows the mix of assets that the fund generally intends to invest in.