OneAnswer KiwiSaver Scheme International Fixed Interest 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

-0.61%

0.33%

1.97%

3.87%

5.46%

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)

  • With the prospects of a rise in global interest rates, most major bond markets lost ground over the quarter. Generally, the prospect of interest rate rises tends to put bond markets on the back foot.
  • In the US, the Federal Reserve raised interest rates, on the back of continued strong growth and building inflationary pressures. This takes its target range to 2–2.25%. It’s the third increase this year, and the eighth since it began tightening monetary policy back in 2015. Elsewhere, the European Central Bank called an end to its Quantitative Easing programme at the end of this year.
  • In the US, the yield on the 10-year government bond rose by 20 basis points to finish the quarter at 3.06%. This meant a negative return from the US bond market in total return terms. Most other major global bond markets took their direction from the US market, with the exception of Australian bonds
  • The fund’s GDP-weighted approach held back returns over the quarter, as it meant that investors had a higher weighting to the underperforming US bonds.
  • While the likelihood of further interest rate increases could impact future returns from this asset class, it’s important to remember that bonds play an important role in any diversified portfolio – helping provide a solid foundation to a broader investment portfolio during times of uncertainty and market volatility.

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

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.

Investment mix as at 30 September 2018

Asset class

Target
investment mix

Actual
investment mix

Cash and cash equivalents

0.0%

0.1%

International Fixed Interest

100.0%

99.9%

 

What sort of fund is this?

Fund description

Invests mainly in international fixed interest assets. Investments may include:

  • fixed interest assets issued by governments or international companies, and
  • cash and cash equivalents.

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 in line with the relevant market index.