OneAnswer KiwiSaver Scheme Australasian Share Fund

New Zealand equities had a challenging start to 2026, with global geopolitical tensions and renewed inflation concerns weighing on risk appetite late in the period. The NZX 50 Index declined over the first quarter, giving back early gains and underperforming several overseas markets. Market weakness was broad‑based, with pressure particularly evident in interest‑rate‑sensitive sectors and companies exposed to global growth, despite a generally steady domestic earnings backdrop.

Monetary policy remained supportive but was overshadowed by inflation concerns. The Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate unchanged at 2.25%, reiterating that policy is likely to remain accommodative for some time. However, inflation remains elevated, with annual CPI rising to 3.1% in the December quarter and higher oil prices later in March adding to concerns around the near‑term inflation outlook. Bond yields rose meaningfully over the quarter, contributing to increased volatility across equity markets.

Economic data painted a mixed picture. Business and consumer confidence weakened as the quarter progressed, reflecting higher fuel prices, geopolitical uncertainty and ongoing pressure on household budgets.

Across the Tasman, Australian equities were also volatile. The ASX 200 Index finished the quarter lower as stronger‑than‑expected inflation prompted the Reserve Bank of Australia (RBA) to raise interest rates twice, resulting in weakness across several cyclical and interest‑rate‑sensitive sectors.

Fund performance over the quarter was driven primarily by stock selection. Positive contributions from New Zealand holdings included an underweight position in Air New Zealand, which added value as the airline continued to underperform amid cost pressures and a challenging operating backdrop. Overweight positions to Contact Energy and Genesis Energy also proved relatively resilient in a volatile market. An underweight exposure to Precinct Properties added value too, as listed property stocks sold off amid rising bond yields.

In addition, underweight exposure to Gentrack Group and Vista Group contributed to relative performance, reflecting a sharp sell‑off in global software stocks as investors reassessed growth expectations and the potential impact of AI‑driven disruption.

These positives were largely offset by several detractors across both markets. An overweight position in Serko weighed on returns as IT and software stocks came under sustained pressure. Overweight exposure to the retirement and property‑linked sectors, notably Oceania Healthcare and Ryman Healthcare, also detracted amid rising bond yields and weaker investor sentiment toward interest‑rate‑sensitive stocks. In Australia, holdings in CSL and Steadfast Group detracted too.

The fund invests mainly in New Zealand and Australian equities. Investments may include:

• Equities in companies that are listed or intend to list on the New Zealand or Australian stock exchanges
• Cash and cash equivalents.

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

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