ANZ KiwiSaver Scheme Balanced Fund

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

• It was a mixed quarter for global shares, with share markets in the US reaching new highs, while geopolitical unrest saw several European share markets end the quarter lower. In the US, the S&P 500 rose 4.3% and the Nasdaq 100 rose 8.5%, with the technology sector and communication services leading the way, while energy and materials underperformed.
• In Europe, France’s CAC 40 Index fell 6.6%, as President Emmanuel Macron called for a snap election and the broader Euro Stoxx 50 fell 2.1%. Asian markets were mostly lower too, with Japan’s Nikkei 225 Index falling 1.8% amid concerns about economic growth after the Bank of Japan (BoJ) ended its zero-interest-rate policy, while closer to home, the NZX 50 fell 3.2%, reflecting the ongoing weakness of the economy.
• In fixed interest, 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, which suggested New Zealanders were tightening the screws as the cost-of-living crisis continued.
• 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 and our domestic equity managers.
• 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 moderate returns, allowing for moderate 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 in similar amounts of income assets (cash and cash equivalents and fixed interest) and growth assets (equities, listed property and listed infrastructue). The fund may also invest in alternative assets.

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