OneAnswer KiwiSaver Scheme International Share Fund

Global equities had a stellar second quarter, with many markets trading to record highs, shrugging off the ongoing uncertainty in the Middle East. The rally was led by the technology sector, which continued its upward momentum. In the US, strong corporate earnings and easing geopolitical concerns supported returns, while Asian markets were among the strongest performers globally, led by Japan and South Korea. European markets also delivered solid gains as falling oil prices helped ease inflation concerns and improve investor sentiment.

All of the fund's underlying managers delivered strong positive returns. The emerging markets allocation, managed by RBC BlueBay and Lazard, was the strongest performer, supported by particularly strong gains across Asia, including South Korea, where semiconductor and technology-related companies were among the best performers globally.

Among the developed market managers, Northern Trust Asset Management was the strongest performer. This reflected the strategy's intended growth bias, which benefited as the strategy has a high weighting to the technology sector which led the market rebound. BlackRock's multi-factor strategy also performed particularly well, while BlackRock's low tracking error strategy and the PIMCO strategy also generated strong returns.

LSV Asset Management, which has a strong focus on value orientated companies, was the more modest performer of the group; however, it still delivered a return comfortably in double digits and was ahead of its benchmark.

At a company level, technology holdings were among the largest contributors, with overweight positions in Dell Technologies, Qualcomm, NetApp and Penguin Solutions benefiting from ongoing artificial intelligence investment, growing demand for data centre capacity and related digital infrastructure spending.

Relative performance was also aided by several underweight positions. An underweight to Microsoft added value as the company underperformed the broader technology sector during the quarter. Underweight positions in Meta Platforms and several energy companies, including Exxon Mobil, Chevron and ConocoPhillips, also contributed to performance. Energy stocks came under particular pressure as oil prices retreated sharply following an easing in Middle East tensions.

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.