ANZ KiwiSaver Scheme Conservative Balanced Fund

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

• The fund has a significant weighting to bonds, making up about half of its holding. Global government bonds had a mixed start to the year, with bonds in the US delivering strong returns, while those in several other markets faced headwinds.
• Despite a positive quarter, US bonds faced increased volatility, primarily due to trade policy news from President Donald Trump. His inconsistent tariff announcements led investors to consider the potential for reaccelerated inflation, which could negatively impact bonds, against the likelihood of a slower growth outlook, which would typically benefit bonds. Ultimately however, US bonds were higher due to a flight to safe-haven assets triggered by declines in equity markets.
• In Europe, bond markets were weaker. German government bonds fell, reflecting concerns about increased defence spending within the region being funded through an increase in bond issuance, while UK bonds faced similar concerns. Japanese government bonds were also lower, given growing expectations the Bank of Japan would increase interest rates due to a pick-up in local inflationary pressures.
• New Zealand bonds finished the quarter slightly higher. The 50-basis-point cut to the Official Cash Rate (OCR) was fully priced into the market, and other economic data – namely inflation and unemployment – also came in largely as expected.
• The fund has a modest exposure to equity markets. US share markets came under pressure, with technology shares particularly weak amid ongoing concerns about new AI developments and their impact on the sector, while other US markets fell on the back of tariff-related concerns. However, European share markets showed resilience, with the Euro Stoxx 50 Index up a solid 7.5% and the UK’s FTSE 100 Index gaining 6.1%.
• Contributing to performance was the fund’s allocation to global bonds, particularly those in the US, which delivered good returns over the quarter. Meanwhile, in equity markets, exposure to US shares was a small drag on performance as they finished the quarter lower.
• We are neutral across global equities, global bonds and New Zealand bonds. Competing narratives continue to hinder high-conviction views. On the one hand, US equities appear to be supported by the pro-business and deregulatory policies from the White House. On the other, economic data appears to be weakening, while ongoing concerns around the impact of tariffs appear to be posing downside risks.

The fund aims to achieve (after the fund charge and before tax) over the long term low to moderate returns, allowing for small to 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. Rates, fees and agreements.

The fund invests mainly in income assets (cash and cash equivalents and fixed interest), with some exposure to growth assets (equities, listed property and listed infrastructure). The fund may also invest in alternative assets.

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