OneAnswer KiwiSaver Scheme Australasian Property Fund

• The New Zealand listed property sector struggled over the quarter, dragged down by the broader share market weakness. The listed property index fell 4.3%, with eight of the 10 companies that make up the index ending in negative territory. The 4.3% decline was ahead of the NZX 50’s 6.4% fall. 
• During the quarter, the Reserve Bank of New Zealand cut the Official Cash Rate (OCR) by 50 basis points, responding to a prolonged period of sluggish growth and falling inflation, which fell back inside the central bank’s target range. In its accompanying forecasts, the central bank expects the OCR to fall to about 3% by the end of the year. 
• Meanwhile, in economic data, the unemployment rate jumped to 5.1%, up from 4.8%, while GDP expanded by 0.7% in the final quarter of 2024, helped by primary industries, retail trade, transport and accommodation. The 0.7% expansion dragged the local economy out of a recession. Elsewhere, inflation held steady in the final quarter of 2024, with prices rising 2.2% over the 12-month period. Rental prices and rates were the largest contributors to price rises, while consumers got some reprieve with lower petrol prices.
• Contributing to relative performance was the fund’s non-holding of Asset Plus, with its shares down 13.5% over the quarter, making it the worst-performing company in the listed property index. Meanwhile, the fund’s cash position was another contributor to performance. With market volatility on the rise, defensive assets such as cash outperformed over the quarter. 
• Offsetting some gains were overweight positions to retirement sector companies, Ryman Healthcare, Oceania Healthcare and Summerset Group. Ryman shares were off 37% after it raised $1 billion capital at a deeply discounted price ($3.05 vs $4.31 at close the day prior) to address its elevated debt and a deterioration of its trading performance. The negative trading update weighed severely on the sector, despite decreasing interest rates, with Oceania’s share price reaching a one-year low (-16% over the quarter), and Summerset dropping by -13%.

The fund invests mainly in New Zealand and Australian listed property assets. Investments may include:

• Companies, funds or trusts that invest in property and are listed or intend to list
• Cash and cash equivalents.

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

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