ANZ Default KiwiSaver Scheme Conservative Fund

Performance is after the annual fund charge and before tax. Rates, fees and agreements.

• The fund has a significant weighting to bonds, which make up over half of its holdings. 
• Global government bond markets were mostly lower over the quarter, despite several central banks delivering interest rate cuts. Interest rate cuts would normally be good for bond prices.
• Meanwhile, in New Zealand, bond markets were mostly higher, as waning economic data saw interest rate markets bring forward expectations of cuts by the Reserve Bank of New Zealand (RBNZ). Weak data included the unemployment rate rising to 4.3%, the highest level since mid-2021, downbeat business and consumer sentiment, and declining retail spending; all of which suggested New Zealanders were tightening the screws as the cost-of-living crisis continued.
• In share markets, returns were mixed. US markets continued their strong run (the S&P 500 rose 4.3% and the Nasdaq 100 was up 8.5%) while several markets in Europe came under pressure amid geopolitical uncertainty. Down under, the NZX 50 fell 3.2%, reflecting ongoing weakness in the economy.
• It was a challenging period for our underlying international equity managers, with negative stock selection holding back fund performance. This was notably the non-holdings of the strong-performing tech sector, while weakness in global bond markets also detracted from performance. The weakness was partially offset by some positive stock selection by our international property manager.
• Over recent times, we’ve been defensively positioned, with an underweight to international shares and an overweight to domestic and international fixed interest. In June, we added to our domestic fixed interest overweight, reflecting our view that the New Zealand economy will be weaker than expected, which could prompt the RBNZ to cut interest rates sooner. More recently, we’ve taken our underweight to international shares back to a neutral position. We believe the probability of a ‘hard landing’ has diminished, with further easing in inflation, robust employment data and expected strong earnings growth to be more supportive of this asset class going forward.

The fund aims to achieve (after the fund charge and before tax) over the long-term low relatively stable returns, allowing for small ups and downs in value.

The graph below shows the value of a $1,000 investment made at the time the fund launched.

Performance is after the annual fund charge and before tax. Rates, fees and agreements.

The fund invests mainly in income assets (cash and cash equivalents and fixed interest), with a smaller exposure to growth assets (equities, listed property and listed infrastructure). The fund may also invest in alternative assets.

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