OneAnswer KiwiSaver Scheme New Zealand Fixed Interest Fund

Fund report as at 30 September 2018

 

Quick links

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

1.24%

4.27%

3.61%

4.90%

5.29%

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)

  • New Zealand bonds rose over the quarter, thanks to a lack of inflationary pressures and as local interest rates look set to stay on hold for longer. Strong investor demand and a lack of new supply also underpinned the local bond market.
  • The yield on the New Zealand 10-year government bond fell 23 basis points to finish the quarter at 2.61%. This meant positive gains from the market in total return terms. Meanwhile, investment grade corporate bonds underperformed government bonds over the quarter.
  • Detracting from returns was our cautious view on New Zealand government bonds, during a time when the bond market rose in value. The fund’s allocation to corporate bonds also detracted from returns, since they underperformed government bonds.
  • While the prospect of higher global interest rates may affect future returns from this asset class, it’s important to remember that bonds play an important role in a diversified portfolio – helping to provide it with a solid foundation. What’s more, New Zealand bonds should be supported by interest rates staying lower for longer and favourable demand dynamics, where new issuance is quickly being snapped up by investors.

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%

New Zealand Fixed Interest

100.0%

99.9%

 

What sort of fund is this?

Fund description

Invests mainly in New Zealand fixed interest assets. Investments may include:

  • fixed interest assets issued by New Zealand or international entities denominated in New Zealand dollars, 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.