Performance as at 31 December 2020
Performance is after the annual fund charge, and before tax and membership fees (if applicable). For more information, see legal information and disclaimers.
What happened this quarter (3 months to 31 December 2020)
- International equity markets continued their stellar rebound in the final quarter of 2020 as the rollout of COVID-19 vaccines raised hopes of a strong economic recovery in 2021. In the US, the S&P 500 and NASDAQ 100 both recorded double-digit gains, while in New Zealand, the NZX had a good finish, ending the quarter up 11.4%.
- Global bond markets had a mixed quarter as rising yields in the US – on the back of growing inflation expectations – saw a number of bonds deliver negative returns. Meanwhile in Europe, bond yields held towards record lows, which saw many European bonds deliver positive returns.
- Despite the rising government bond yields in the US, the Federal Reserve maintained its accommodative rhetoric. At its November meeting, the Fed said economic activity remains “well below” pre-COVID levels and Chair Jerome Powell added that the central bank is strongly committed to using all its monetary policy tools through the challenging times.
- In New Zealand, bonds underperformed as better-than-expected economic data pushed bond yields higher – a scenario that tends to see bonds struggle. Most notably, GDP figures for the third quarter showed the economy had a strong recovery out of the recession, with growth rising 14% quarter-on-quarter.
- Given the progress on the vaccine front, we are cautiously optimistic on the outlook for the global economy. With this in mind, we hold an overweight position in international equities and Australian equities.
Need more information?
Read our Market Review for more information on investment markets.
How the fund has performed over time
The fund aims to achieve (after the fund charge and before tax) over the long term a moderate yearly return allowing for moderate movements of value up and down including occasional negative yearly returns.
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 and membership fees (if applicable). For more information, see Legal information and disclaimers.