ANZ KiwiSaver Scheme Cash Fund

The Cash Fund aims for lower, relatively stable long-term returns, allowing for smaller ups and downs in value.

This fund could suit investors who expect to access their KiwiSaver savings soon and want minimal changes in investment value.

There is no minimum suggested investment timeframe for this fund, due to the smaller expected short-term ups and downs.

The risk indicator for this fund is 2, on a scale from 1 (low) to 7 (high). The rating reflects how much the value of the fund’s assets goes up and down (volatility). A higher risk means higher potential returns over time, but more ups and downs along the way.

Financial markets faced a more challenging environment during the quarter as inflation remained elevated and central banks continued to raise interest rates. Ongoing tensions in the Middle East and higher energy prices contributed to concerns that inflation could remain above target levels for longer, while bond markets came under pressure as investors reassessed the outlook for monetary policy.

In New Zealand, the Reserve Bank of New Zealand increased the Official Cash Rate twice during the quarter to 2.75% as it continued its efforts to bring inflation under control. While business confidence remained relatively resilient, economic conditions were mixed, with higher borrowing costs weighing on households and the unemployment rate increasing. Across the Tasman, the Reserve Bank of Australia also raised interest rates as inflation remained above its target range.

Against this backdrop, cash continued to provide a stable source of income and liquidity for investors. Higher short-term interest rates supported returns from cash investments, while the asset class maintained its low-risk characteristics during a period of heightened market volatility.

This is a low-risk fund focused on preserving capital while providing stable returns. The fund invests primarily in bank deposits, floating-rate notes and other high-quality short-term securities. This approach helps provide liquidity, minimise volatility and take advantage of attractive short-term interest rates when opportunities arise. Over the quarter the fund also increased its exposure to short-term AAA-rated securitised assets.

Overall, the fund remained well positioned throughout the quarter, continuing to prioritise capital protection, liquidity and steady returns for investors.