OneAnswer KiwiSaver Scheme International Share Fund

• Global equity markets had a volatile quarter, starting with a sharp sell-off after US President Donald Trump’s “Liberation Day” tariff announcement. However, markets rebounded as the administration adopted a more conciliatory tone, with several indices reaching record highs. The US rally was led by technology stocks, as cooling inflation and resilient employment data restored investor confidence. The Nasdaq 100 and S&P 500 both reached fresh record highs, rising 17.6% and 10.6% respectively (in local currency terms).
• European equities also rebounded, with the UK’s FTSE 100 hitting a new high and Germany’s DAX gaining on strong industrial earnings and export optimism. The European Central Bank maintained a dovish stance, helping anchor sentiment amid subdued inflation. In Asia, Japan’s Nikkei 225 rose steadily, up 13.2% on a weaker yen, while China’s Shanghai Composite rose 3.3%, underperforming due to weak industrial profits.
• Market volatility briefly resurfaced in June following US strikes on Iranian nuclear facilities, but eased quickly as markets resumed their uptrend.
• Performance was primarily influenced by stock selection, especially in growth-oriented sectors like information technology and healthcare. Growth stocks outperformed the broader market, supported by momentum and robust earnings from AI-related firms.
• Information technology led sector performance, driven by strong results from several megacap companies. Nvidia rose 45% to record highs amid renewed AI interest. Broadcom, another key player in the chipmaking space, climbed over 60%, while Microsoft gained after a blockbuster earnings report and upgraded forward guidance.
• Although the fund holds each of these companies, it is structurally underweight, so overall this detracted from relative performance to the benchmark.
• Conversely, an underweight position to Apple contributed positively to performance, as its shares declined over the quarter. Despite solid earnings, investors reacted cautiously to tariff pressures, slower iPhone momentum, and concerns around premium valuation.

The fund invests mainly in international equities. Investments may include:

• Equities in companies that are listed or are soon to be listed on a stock exchange
• Cash and cash equivalents.

This chart shows the mix of assets that the fund generally intends to invest in – 100% equities.

See the fund's actual investment mix on page 3 of the fund update.