What happened this quarter (3 months to 30 September 2020)
For the most part, international equity markets finished the quarter higher, on optimism that the pandemic – at least from an economic standpoint – is behind us. In the US, tech stocks had another strong quarter, with the NASDAQ 100 gaining more than 10%. Meanwhile, in New Zealand, the NZX 50 underperformed slightly, but still recorded a gain of 2.6%.
Global bond markets had a relatively subdued quarter, with interest rates in most parts of the world hovering at or near all-time lows.
After aggressively cutting rates and/or increasing quantitative easing earlier in the year, central banks held this accommodative stance throughout the quarter, reaffirming that interest rates would remain low for a prolonged period. In fact, in September, the US Federal Reserve said it expects the fed funds rate to remain at zero through to 2023.
It was a different story in New Zealand, with bond markets recording solid gains after the Reserve Bank of New Zealand increased its bond-buying programme to $100 and noted that a negative OCR is a policy tool it could implement – commentary that saw interest rates decline sharply; the 10-year government bond yield finished the quarter down 43 basis points.
Given the mild improvement in economic sentiment, we hold an overweight position in international equities and Australian equities. We've also added a small overweight to domestic property.
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Read our Market Review for more information on investment markets.
How the fund has performed over time
The fund aims to achieve (after the fund charge and before tax) over the long term a moderate to higher yearly return allowing for moderate to large movements of value up and down including occasional negative yearly returns.
The graph below shows the value of a $1,000 investment made at the time the fund launched.
The fund invests mainly in growth assets (equities, listed property and listed infrastructure), with some exposure to income assets (cash and cash equivalents and fixed interest). The fund may also invest in alternative assets.
This chart shows 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.