How your investment funds performed

You’ll soon receive your annual account statement. Your statement shows how your investment performed for the year to 31 March 2024, and helps you understand if you’re on track towards achieving your savings or retirement goals.

As well as summarising any contributions you made to your account (and in the case of KiwiSaver, any employer or Government contributions you may have received), your statement tells you what your investment returns were, and any fees and taxes you have paid.

A key driver of investment returns is how the fund or funds you’re invested in performed, and as you may have seen in the media, financial markets were a bit up and down. The following sets out what happened over the year to 31 March 2024.

It was a good year for shares, with several international markets in the US, Europe and Asia achieving record highs, underpinning some good returns for growth-orientated funds. Most of those gains came in the last six months as central banks began to signal the next interest rate move would likely be downwards, as inflation appears to head back – albeit slowly – to target levels.

The year began with bonds losing ground as central banks continued to raise interest rates to combat inflation (as interest rates rise, the value of bonds decline). However, as many central banks paused those rate hikes, bonds began to claw back losses so that several bond markets ended the year back in positive territory.

It was a challenging year for New Zealand markets, especially shares, which significantly underperformed their global counterparts. The local NZX 50 Index – which is sensitive to interest rate changes – had to contend with the headwinds created as the Official Cash Rate (OCR) rose to its highest level since before the global financial crisis. 

Furthermore, New Zealand had more of a struggle with inflation, which remains elevated compared to most other countries. This resulted in:

1. The central bank signalling it was prepared to keep interest rates higher for longer – negatively impacting the local share market. 
2. Higher inflation weighing on New Zealanders’ discretionary spending, which saw the economy fall into recession late in 2023.

Aided by the strong share market performance discussed above, those funds with a significant investment in shares – such as our Balanced and Balanced Growth funds – delivered good returns, while investors in our Growth Fund enjoyed double-digit gains.

Investors in our High Growth fund – which launched in August 2023 – also enjoyed solid returns given the fund’s significant investment to strong-performing shares.

Meanwhile, our funds with a greater investment in bonds – such as our Conservative and Conservative Balanced funds – did not fare as well by comparison. Nevertheless, they still delivered positive returns over the year.

As we head to the mid-point of 2024, markets are still facing periods of volatility. Debate around when central banks will begin to cut interest rates remains a key topic of conversation. Meanwhile, the geopolitical unrest in Ukraine and the Middle East has the potential to spill over into financial markets.

Despite this, your investments remain in good hands thanks to our dedicated team of investment specialists who continue to monitor and respond to these situations. Furthermore, we ensure our funds are well diversified to manage the ups and downs investing can always bring.