ANZ KiwiSaver Scheme Cash Fund

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

• With central banks holding interest rates at multi-year highs and bond yields elevated, cash continued to deliver positive and steady returns over the quarter.
• The Cash Fund is a low-risk fund that aims to preserve capital for investors while offering low volatility in returns. With interest rates hovering near decade-highs, the fund continues to deliver stable returns, as seen by its one-year return of 5.9%.
• Data continued to highlight the challenging economic backdrop facing New Zealand. The unemployment rate rose to 4.3% – the highest level since mid-2021 – and business and consumer sentiment surveys remained downbeat. Retail spending data suggested New Zealanders are tightening the screws as the cost-of-living crisis continued, and while GDP (Gross Domestic Product) figures showed that the economy came out of a recession, on a per capita basis it continued to contract at a material pace.
• Meanwhile, inflation in New Zealand eased to its lowest level in nearly three years. The Consumer Price Index (CPI) rose 0.6% in the three months to end March 2024, bringing the annual inflation rate down to 4.0%, its lowest level since June 2021. However, domestically generated inflation continued to surprise on the upside, at 5.8%. This was seen to reinforce the Reserve Bank of New Zealand’s (RBNZ) cautious stance when it came to setting interest rate policy.
• As largely expected, the RBNZ offered businesses and households no relief, leaving interest rates unchanged throughout the quarter at 5.50%. It did however raise its Official Cash Rate (OCR) track – where it expects the OCR to peak – by 5 basis points to 5.65%, implying a 60% chance of another interest rate hike. However, interest rate markets continued to bet against the next move being a hike, and by quarter end, markets were pricing in a quarter percent cut by the end of 2024.

The fund invests mainly in cash and cash equivalents. These may include investments issued by New Zealand-registered banks, the New Zealand Government, corporations or local authorities, or non-New Zealand governments.

This chart shows the mix of assets that the fund generally intends to invest in – 100% cash and cash equivalents.