OneAnswer KiwiSaver Scheme Balanced Fund

Performance is after the annual fund charge and before tax. Legal information and disclaimers.

• Global equity markets experienced significant volatility this quarter, starting with a sharp sell-off following US President Donald Trump’s “Liberation Day” tariff announcement, which caught investors off guard due to its unexpectedly aggressive scope. However, markets rebounded in the following weeks as the administration adopted a more conciliatory tone, with several indices reaching record highs by the end of the quarter.
• US equity markets were the best performing, led by technology stocks, as investor appetite for AI-related companies returned. The Nasdaq 100 and the S&P 500 both surged back to record highs, ending the quarter up 18.0% and 10.9% respectively.
• European equities also rebounded, with the UK’s FTSE 100 hitting a new high and Germany’s DAX gaining on a bullish outlook for the country's fiscal expansion offset fears of economic pressure from global trade tensions. The European Central Bank (ECB) maintained a dovish stance, helping anchor sentiment amid subdued inflation.
• In New Zealand, the NZX 50 delivered a more modest return of 2.7%. While first-quarter data showed the economy expanded by a solid 0.8%, more recent indicators suggest a slowdown in the second quarter, driven by subdued consumer spending and a sluggish housing market.
• The fund has an exposure to bonds, which were generally higher over the quarter. US bonds posted gains but lagged behind several international peers. Investor caution stemmed from concerns that tariffs might fuel inflation, alongside scrutiny of the country’s fiscal outlook with government debt rising. Meanwhile, European bond markets outperformed, supported by the ECB’s dovish stance, which included two separate 25-basis-point rate cuts. UK bonds also saw solid gains, driven early in the quarter by news that annual inflation had eased to 2.6% as of 31 March.
• In New Zealand, bond returns were modest and trailed most global counterparts. Although the Reserve Bank of New Zealand implemented two rate cuts, markets adjusted expectations for future easing after one committee member voted to keep rates unchanged in May. Additionally, a pick-up in food prices also posed upside risks to inflation.
• Positive fund performance was largely driven by its exposure to listed infrastructure, which had a strong quarter. The sector benefitted from its resilience during times of heightened economic uncertainty. Infrastructure assets typically generate stable cash-flows, operating in sectors that have high barriers to entry. Offsetting some positive fund performance was negative stock selection in international equities – notably a lack of exposure to several of the large-cap tech companies.
• We recently introduced an underweight position to US equities, based on concerns that valuations are stretched, economic growth is slowing, and the labour market is showing signs of weakness. Additionally, rising geopolitical tensions may further pressure equity prices as tariff-related costs begin to impact corporate earnings. Elsewhere, we maintain an overweight position in US 10-year government bonds. Given the current economic uncertainties and labour market concerns, we believe defensive assets like government bonds are well-positioned to perform.

The fund aims to achieve (after the fund charge and before tax) over the long term moderate returns, allowing for moderate ups and downs in value.

The graph below shows the value of a $1,000 investment made at the time the fund launched.

Performance is after the annual fund charge and before tax. Legal information and disclaimers.

The fund invests in similar amounts of income assets (cash and cash equivalents and fixed interest) and growth assets (equities, listed property and listed infrastructue). The fund may also invest in alternative assets.

This chart shows the mix of assets that the fund generally intends to invest in.