OneAnswer KiwiSaver Scheme Select International Share Fund

The Select International Share Fund invests mainly in international equities with a focus on environmental, social and governance (ESG) considerations. Investments may include equities in companies that are listed on a recognised stock exchange, and cash and cash equivalents.

The Select International Share Fund aims to achieve a return (after the fund charge and before tax) that over the long-term outperforms the relevant market index.

Minimum suggested investment timeframe is 10 or more years. The minimum suggested timeframe indicates how long to stay invested to manage short-term ups and downs and give your investment time to recover from any drops in value.

The OneAnswer KiwiSaver Scheme Select International Share Fund was formerly the OneAnswer KiwiSaver Scheme Sustainable International Share Fund.

See Past updates for our funds.

Global equity markets experienced a volatile quarter, largely driven by ongoing hostilities in the Middle East, which kept energy prices elevated and fuelled concerns that inflationary pressures could persist for longer than previously expected. Despite the volatility, global equities delivered positive returns, supported by resilient corporate earnings and relatively strong economic activity in the US.

In the US, the S&P 500 Index rose 2.3% (in local currency terms), trading to fresh record highs. While the energy sector benefited from higher commodity prices, performance within technology was more mixed, with semiconductor stocks coming under pressure while several large-cap technology companies continued to perform strongly. European and Asian markets were generally weaker over the quarter as investors grappled with higher bond yields, inflation concerns and regional economic challenges.

During the quarter, the fund's underlying investment approach evolved from a predominantly quality-focused strategy to a broader multi-factor approach. The enhanced process combines factors such as quality, value, momentum and long-term stakeholder value, with the aim of providing more diversified sources of return across different market environments.

During the quarter, the fund benefited from diversified sources of return across multiple sectors and investment factors. Relative performance was supported by strong stock selection within the industrials, consumer discretionary and financials sectors. At a company level, holdings in Valero Energy, NetApp and Recruit Holdings were among the strongest contributors. Valero Energy benefited from higher energy prices, while NetApp and Recruit Holdings outperformed following stronger-than-expected earnings results and positive business momentum. The fund also benefited from its positions in Salesforce, NVIDIA and Equinor.

Offsetting some of these gains were several positions within the information technology and communication services sectors. Holdings in semiconductor equipment companies Applied Materials, KLA Corporation, LAM Research and Western Digital detracted from returns as sentiment towards parts of the semiconductor sector weakened during the quarter. Underweight positions in Microsoft and Meta Platforms also weighed on relative performance as both companies were among the stronger performers in global markets, supported by continued investor enthusiasm for artificial intelligence-related technologies and digital services.