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OneAnswer KiwiSaver Scheme New Zealand Fixed Interest Fund

Fund report as at 30 June 2020

How has the fund performed?

Performance as at 30 June 2020


Funds
3 months 1 year 3 years (pa) 5 years (pa) Since launch
3.36% 6.06% 5.75% 5.04% 5.50%

 

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 2020)

  • New Zealand bond markets had a relatively quiet quarter, as accommodative monetary policy saw interest rates hold near multi-year lows.
  • In New Zealand, the Reserve Bank of New Zealand (RBNZ) said at its 13 May meeting it would nearly double its quantitative easing programme, announcing it would buy up to another $27 billion in bonds over the next 12 months. The RBNZ added that it expects the Official Cash Rate to remain at 0.25% until early 2021.
  • Against this backdrop of a relatively quiet period for bond markets, the New Zealand 10-year government bond yield ended the quarter at 0.93%, down 15 basis points.
  • Economic data over the quarter showed COVID-19 is continuing to have a significant impact on the economy. Of note, GDP figures showed the economy contracted by 1.6% in the first quarter, below expectations. This means the New Zealand economy is likely in a recession. Elsewhere, retail sales data for the first quarter fell 0.7%, again below expectations. The decline was particularly significant in the automobile, restaurant and hotel sectors.
  • Given the ongoing uncertainty around COVID-19, central banks are expected to remain accommodative, a scenario supportive for bond investors.
  • The fund has a significant weighting to sovereign (government) bonds, which underperformed corporate bonds over the quarter.

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.