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OneAnswer KiwiSaver Scheme New Zealand Fixed Interest Fund

Fund report as at 30 June 2021

How has the fund performed?

Performance as at 30 June 2021


Funds
3 months 1 year 3 years (pa) 5 years (pa) Since launch
-0.02% -1.94% 3.71% 3.08% 4.94%

 

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 30 June 2021)

  • Following a challenging start to the year, bond markets fared better this quarter, shrugging aside inflationary concerns to deliver modest gains.
  • New Zealand bonds rose, although not as strongly as some overseas counterparts. Some stronger-than-expected local economic data had investors continuing to come around to the view that the Reserve Bank of New Zealand (RBNZ) may be one of the first central banks to raise interest rates. Of particular note was Gross Domestic Product data, which showed the local economy grew by 1.6% in the first quarter (an annual rate of 2.4%) – well ahead of expectations.
  • That said, the RBNZ opted to keep the Official Cash Rate unchanged at a record low of 0.25% throughout the quarter. Following the May meeting, it reintroduced its forward forecasts, which appeared to show it expects interest rates to begin to rise towards the end of 2022. For now, however, its view was that “ongoing virus-related restrictions in global activity and an uneven path of economic growth still warrant a cautious approach to policy”.
  • The New Zealand government yield curve flattened over the quarter. The yield on 2-year bonds (which is more sensitive to the prospect of higher interest rates) rose 23 basis points to 0.52%, while the yield on the 10-year bond fell by 4 basis points to 1.77%.
  • We expect bond yields to move higher as the reopening recovery continues, and as global central banks move closer to normalising interest rates.  

Need more information?

Read our Market Review for more information on investment markets.

What does the fund invest in?

The fund invests mainly in New Zealand fixed interest assets. Investments may include:

  • fixed interest assets in New Zealand dollars, or issued by New Zealand located or incorporated entities and hedged back to New Zealand dollars, and
  • cash and cash equivalents.

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


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

See the fund's full portfolio holdings.

ANZ New Zealand Investments Limited ('ANZ Investments') is the issuer and manager of the OneAnswer KiwiSaver Scheme. Important information is available under terms & conditions. Download the guide and product disclosure statement.

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