ANZ KiwiSaver Scheme High Growth Fund

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

International share markets continued their strong run, with many indices reaching new highs. The rally was supported by solid company earnings, growing interest in artificial intelligence, and expectations that central banks would cut interest rates. US markets led the way, with the S&P 500 Index and the Nasdaq 100 Index both delivering solid gains. The tech sector was particularly strong, with companies like Nvidia, Apple and Alphabet driving performance.

Asian markets also performed well, with Japan and Choina posting double-digit gains. China’s share market climbed to a 10-year high, boosted by strength in AI-related sectors and signs of improving consumer demand. European markets delivered more modest returns, held back by political uncertainty in France and persistent inflation in the UK.

In New Zealand, the NZX 50 Index was also up, with most companies finishing the quarter in positive territory. However, the broader economy showed signs of strain. GDP contracted by 0.9% in the June quarter, marking the third decline in five quarters. Annual growth fell 1.1%, and unemployment rose to 5.2%. Consumer and business confidence remained subdued, although falling mortgage rates may help support a gradual recovery.

Meanwhile, central banks responded to softer economic data with interest rate cuts. In the US, the Federal Reserve (the Fed) cut interest rates by 25 basis points, its first move of the year. The Fed signalled more cuts could follow, responding to signs of a weakening labour market. In New Zealand, the Reserve Bank also lowered the Official Cash Rate by 25 basis points, taking it to 3.00% (it has since cut rates further, to 2.50%). The move followed the weaker-than-expected growth numbers. Investors now expect further cuts, with markets pricing the OCR to fall below 2.25% by year-end.

New Zealand listed property was also a standout performer this quarter, as lower interest rates boosted demand for income-generating assets. International listed infrastructure also delivered positive returns, benefiting from its defensive characteristics in a more uncertain economic environment. These assets tend to offer stable cash flows and performed well as investors sought resilience amid mixed economic signals.

Fund performance was driven by strong absolute returns across equities, listed property, and infrastructure. While some tactical positions were exited during the quarter, the fund remained well-diversified across growth assets and flexible in response to changing market conditions.

We head into the final quarter of the year with a neutral stance across shares and currencies. While valuations remain elevated and economic data is mixed, resilient company earnings and ongoing investment in technology continue to support markets. In this environment, we believe a balanced and flexible approach remains appropriate.

The fund aims to achieve (after the fund charge and before tax) over the long term higher returns, allowing for larger 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. KiwiSaver rates, fees and agreements.

The fund invests in growth assets (Australasian equities and international equities), with a very small exposure to income assets (cash and cash equivalents and fixed interest). The fund may also invest in alternative assets.

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