OneAnswer KiwiSaver Scheme Balanced Fund

Performance is after the annual fund charge and before tax. KiwiSaver rates, fees and agreements.

Global share markets closed the year on a positive note, although performance varied by region. In the US, major indices posted solid gains, with the S&P 500 and Nasdaq both up 2.7% over the quarter. There was a pause in the AI-driven momentum that dominated earlier in the year, as investors rotated into sectors such as financials and industrials.

Europe delivered standout returns. Easing inflation boosted sentiment, driving the FTSE 100 up 6.9% and the Euro Stoxx 50 up 5.0%, with several benchmarks reaching record highs. Meanwhile, Japan’s Nikkei 225 continued its stellar run, ending the quarter with double-digit gains and bringing its 12-month return to 28.7%. Japanese shares benefited from a weaker yen, ongoing corporate reforms, and improved business outlook following the election of Sanae Takaichi as prime minister.

New Zealand shares posted modest gains in Q4, with the NZX 50 up 1.9%, bringing its annual return to 3.3%, well behind most of its global peers. Persistent economic headwinds tempered sentiment despite broad-based gains, as 36 of 50 index constituents finished higher.

Global bond markets were mixed over the quarter as investors weighed up the outlook for interest rate policy heading into 2026. In the US, bonds eked out small gains as the Federal Reserve cut interest rates. European bond markets were more mixed. German government bonds weakened as the European Central Bank kept interest rates steady, while UK bonds were some of the strongest-performing bond markets after a surprise drop in inflation saw the Bank of England cut interest rates.

New Zealand bonds delivered a weaker performance this quarter, despite further monetary easing by the Reserve Bank of New Zealand (RBNZ). The RBNZ cut the Official Cash Rate twice – first by 50 and then by 25 basis points. However, November’s cut was flagged as likely the last in this cycle, prompting markets to reassess expectations for further easing. This shift triggered the sell-off in bonds.

Positive fund performance was largely driven by domestic holdings – notably underweight positions to weaker-performing New Zealand bonds and shares. Meanwhile, closing out the overweight position in the New Zealand dollar added further gains. However, these gains were partly offset by the fund’s allocation to Australian bonds, which came under pressure amid renewed inflation concerns.

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. KiwiSaver rates, fees and agreements.

The fund invests in similar amounts of income assets (cash and cash equivalents and fixed interest) and growth assets (Australasian equities and International equities). The fund may also invest in alternative assets.

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