ANZ KiwiSaver Scheme Growth Fund

Fund report as at 31 December 2023

How has the fund performed?

Performance as at 31 December 2023

Rate

3 months

7.55%

1 year

12.66%

3 years (p.a.)

3.60%

5 years (p.a.)

8.43%

10 year (p.a.)

8.05%

Since launch (p.a.)

6.80%


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


What happened this quarter (three months to 31 December 2023)

  • Global share markets had a stellar quarter as easing of inflationary pressures and the growing likelihood central banks had finished their interest rate hiking cycle gave growth assets a boost. 
  • US share markets were some of the best-performing, with the S&P 500 rising 11.7% and the NASDAQ 100 up 13.8%. Most of the major sectors finished higher, with information technology and real estate two of the standout performers, while energy fell given the decline in oil prices over the quarter.
  • Most other markets took their lead from the US. In Europe, the Euro Stoxx 50 Index was 8.6% higher, and Japan’s Nikkei 225 Index gained 5.2% as its market hit a new 33-year high in November. Closer to home, the NZX 50 delivered a 4.2% return as the prospect of further interest rate hikes remained. 
  • A key laggard was the UK share market, gaining only 1.6% given its significant exposure to energy companies, which struggled as oil prices fell. However, the key underperformer was China. The Shanghai Composite Index finished the quarter down 4.2%, as a lack of action from the central bank there to stimulate its sluggish economy weighed on sentiment.
  • Global and domestic bonds also delivered strong gains over the quarter as most major central banks pivoted to a more dovish stance, which saw interest rates fall – a scenario where bond prices tend to perform well. 
  • Given the fund’s significant allocation to shares, it was no surprise that the biggest impact on fund performance was from international shares, one of the best-performing asset classes over the quarter. 
  • Meanwhile, although the fund has only a small allocation to bonds, our international bond managers also contributed to relative performance.
  • We remain underweight to international shares, and overweight to domestic and international fixed interest. This reflects our belief that the global economy will start to slow in the coming months, dragged down by the flow-on effect of higher interest rates. We expect labour markets to soften and slow consumption, which will eventually weigh on economic growth. Our base case is that we will see a mild recession in the US in 2024.


How the fund has performed over time

The fund aims to achieve (after the fund charge and before tax) over the long term high returns, allowing for large ups and downs in value.

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



The x-axis (horizontal) shows annual dates from September 2007 to December 2023. The y-axis (vertical) shows values from $0 to $3,500 in $500 increments. The line is labelled 'Growth Fund'. The line starts at a value of $1,000 for September 2007. The trend is downwards until a low of approximately $700 between September 2008 and September 2009. The trend is then upwards, other than a dip between September 2018 and September 2019, and a larger dip between September 2019 and September 2020. The trend then continues mostly upwards until a sustained decline over 2022. After a good first half to 2023, followed by a tough third quarter, the value recovers to $2,915.59.


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

What does the fund invest in?

The fund invests mainly in growth assets (equities, listed property and listed infrastructure), with a smaller 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.



Income assets:

- 4% Cash and cash equivalents
- 16% Fixed interest

Growth assets:

- 9% Listed property
- 68% Equities
- 3% Other (listed infrastructure)


See the fund's actual investment mix on page 3 of the fund update.


Important information

ANZ New Zealand Investments Limited is the issuer and manager of the ANZ KiwiSaver Scheme. Important information is available under terms and conditions. Download the guide and product disclosure statement.

This material is for information purposes only. We recommend seeking financial advice about your situation and goals before getting a financial product. To talk to one of our team at ANZ, please call 0800 736 034, or for more information about ANZ’s financial advice service or to view our financial advice provider disclosure statement see anz.co.nz/fapdisclosure