OneAnswer KiwiSaver Scheme Conservative Fund

Fund report as at 30 September 2018

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How has the fund performed?

What does the fund invest in?

What sort of fund is this?

How has the fund performed?

Performance as at 30 September 2018

3 months

1 year

3 years (pa)

5 years (pa)

Since launch

0.84%

3.94%

4.29%

5.47%

5.57%

Performance is after the annual fund charge, and before tax and membership fees (if applicable). For more information, see legal information and disclaimers.

What happened this quarter (3 months to 30 September 2018)

  • The fund has a significant weighting to bonds, which make up around 60% of its holdings. Bonds (which are more sensitive to changes in interest rates) fell in value over the quarter, as some of the world’s major central banks revert to more ‘normal’ interest rate levels following a period of very low rates.
  • Meanwhile, share markets delivered strong gains, despite ongoing trade concerns between the US and China. In the US, wide-sweeping tax cuts and robust economic growth meant that most companies reported strong results and profits.
  • Our tactical positioning was of benefit to the fund’s performance this quarter. We have been overweight international shares, which have performed well, and underweight international bonds, which have struggled. Our exposure to New Zealand listed property also helped, as the local property market has been supported by strong demand and very low vacancy rates.
  • However, some weak company selection among the fund’s international shares managers, and in Australian equities, held returns back slightly.
  • International shares should continue to be supported by a recovery in global growth. We retain an overweight position, although have scaled this back slightly following the recent strong run from this market. Meanwhile, we continue to hold an underweight position in international bond markets, where returns should be limited as global interest rates move higher.

Need more information?

  • Read our Market Review for more information on investment markets
  • Key read: why it’s wise not to try to time the market or chase returns

How the fund has performed against its objective

The graph below shows the value of a $1,000 investment made at the time the fund launched. The blue line represents the actual value of the investment while the aqua line shows the level (fund objective) the fund aims to beat over the long term. When the blue line is higher than the aqua line, the performance is better than target.

Performance is after the annual fund charge and before tax and membership fees (if applicable). For more information, see legal information and disclaimers.

What does the fund invest in?

In the table below, the ‘target investment mix’ shows the mix of assets the fund generally intends to invest in. Depending on our current strategy, the actual mix can be ‘overweight’ (the fund holds more than target), ‘underweight’ (the fund holds less than target) or neutral.

Being ‘overweight’ a particular asset class means we favour this asset class in the current investment environment, while ‘underweight’ is the opposite.

Investment mix as at 30 September 2018

Asset class

Target
investment mix

Actual
investment mix

Difference

Cash and cash equivalents

20.0%

20.8%

0.8%

New Zealand Fixed Interest

18.0%

17.3%

-0.7%

International Fixed Interest

42.0%

40.4%

-1.6%

Australasian Equities

4.5%

4.8%

0.3%

International Equities

12.5%

13.7%

1.2%

Listed Property

3.0%

3.0%

0.0%

 

What sort of fund is this?

Fund description

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

Target investment mix

The mix of assets that the fund generally intends to invest in.

See the fund's actual investment mix in the table above.

Fund objective

Aims to achieve a positive yearly return (after the fund charge and before tax) that over the long term is 1.7% over inflation (allowing for a negative return 3.4 years in every 20).