OneAnswer KiwiSaver Scheme Sustainable International Share Fund

• Global equity markets had a volatile quarter, starting with a sharp sell-off after US President Donald Trump’s unexpected “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 bolstered investor confidence. The Nasdaq 100 and S&P 500 reached fresh record highs, rising 17.6% and 10.6% respectively.
• 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.
• The fund outperformed in the energy sector. Stocks faced pressure from falling oil prices and growth concerns, weighing on cyclicals. Its structural underweight to oil majors contributed positively, as Exxon Mobil, Chevron, ConocoPhillips and BP declined more than 15%.
• Information technology was a more challenging area. The absence of Advanced Micro Devices, Palantir Technologies and Oracle detracted, as all three reported strong earnings and rebounded sharply.
• Offsetting some of the underperformance were overweight positions to strong-performing technology companies, Nvidia and Tokyo Electron. Shares in Nvidia rose nearly 50% reaching record highs amid renewed investor interest in AI, while Tokyo Electron’s share price rose nearly 40%, benefiting from the same AI-driven momentum. Furthermore, the company reported a 33% year-on-year increase in sales and a 53% rise in operating income.

The fund invests mainly in international equities with a focus on environmental, social and governance (ESG) considerations. Investments may include:

• Equities in companies that are listed on a recognised 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.