OneAnswer KiwiSaver Scheme Australasian Share Fund

• New Zealand shares were higher over the quarter, with the NZX 50 finishing up 6%, benefiting from an interest rate cut by the Reserve Bank of New Zealand (RBNZ). New Zealand shares have typically outperformed in low-interest-rate environments. Of the 50 companies in the NZX 50, 41 finished higher.
• The RBNZ cut the Official Cash Rate (OCR) by 25 basis points in August, its first cut since the pandemic emergency cut in 2020. The cut came as economic data showed the local economy continues to struggle. Weak economic data included a 1.2% decline in Q2 retail sales (the ninth quarterly decline over the past 10 quarters), while unemployment rose to 4.6% (the highest level in more than three years). Meanwhile, the economy contracted by 0.2% in the three months to June 2024. Primary industries continued to weaken, with mining dropping 3.7% and the agriculture, forestry and fishing sectors down 1.4%. Then, in early October, the RBNZ cut the OCR by a further 50 basis points. 
• In Australia, the ASX 200 rose 7.8%, hitting a new record high. Despite weakness in commodity prices – notably oil and iron ore – Australian shares saw strong gains in the financials and technology sectors. 
• Economic data was generally positive, which saw the Reserve Bank of Australia (RBA) leave interest rates unchanged and maintain a mildly hawkish bias. 
• Benefiting fund performance were underweight positions in poor-performing companies, Auckland International Airport and Spark, with shares in the companies falling 0.9% and 22.8% respectively. Auckland Airport came under pressure after the Commerce Commission said that the methodology it used to calculate pricing was not consistent with its estimates and could result in excess profits of about $200 million. Meanwhile, Spark shares fell after it reported a 72% fall in net profit from $1.1 billion to $316 million. Part of the drop in profit was due to the $583 million sale of 70% of its cell tower network in FY2023. Nevertheless, the result fell short of expectations.
• Elsewhere, overweight positions to Pacific Edge and James Hardie Industries also contributed to fund performance, with shares in these two companies recording double-digit gains. Pacific Edge rose more than 50% after news of the forthcoming publication of an American Urological Association (AUA) review of its microhaematuria guidelines. The outcome of the review could have a positive impact on the adoption of the company’s signature Cxbladder technology in the US. Meanwhile, James Hardie shares recovered from a challenging Q2 to finish up 20.9% over the quarter. 
• Other strong performers included Port of Tauranga and Fletcher Building, whose share prices gained 28.8% and 12.4% respectively.

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.