Welcome to your June update
Dear member, welcome to the Lifestages KiwiSaver Scheme Investor Update for June 2024. Below you will find the latest performance data and market commentary from your SBS Wealth Investment Management Team.
Performance data
Performance as at 31 May 2024.
| Fund Option | 1M | 1Y | 5Y pa |
| High Growth Fund | 1.33% | 17.12% | 8.51% |
| Auto 0-49 Option | 1.33% | 17.12% | 8.51% |
| Auto 50-54 Option | 1.21% | 14.38% | 6.99% |
| Auto 55-59 Option | 1.09% | 11.65% | 5.39% |
| Auto 60-64 Option | 0.97% | 8.95% | 3.76% |
| Auto 65+ Option | 0.91% | 7.61% | 2.69% |
| Income Fund | 0.73% | 3.65% | 0.42% |
The Lifestages Auto Options invest in combinations of the Lifestages High Growth Fund and the Lifestages Income Fund in proportions that vary in accordance with pre-selected age bands. These options automatically adjust the risk profile of your investment by altering the proportions invested in the funds based on your age.
Performance is shown after fees and before tax. For more information about how performance is calculated and more performance periods, click here.
Market Update
May saw performance pick up again for the Lifestages Income Fund, benefitting from higher fixed interest rates, which played a greater role in returns.
Returns were driven by movements in overseas interest rates, as rate cut expectations continued to be moderated by central banks around the world from earlier expectations of more cuts to the now “higher for longer” narrative.
US equities produced most of the gains despite progress on inflation stalling (Nvidia +26%, Apple +13%, Clean Energy +12%). Softer than expected jobs growth lead the foreign exchange rate to fall against the New Zealand Dollar, meaning that when converted back to local currency, performance was somewhat muted. A 50% currency hedge on international equities within the Lifestages High Growth Fund helped protect the Fund from the falling NZ dollar.
RBNZ surprised the market during the May monetary policy statement, hinting that the next move was more likely to be a hike, rather than a cut. The OCR was ultimately left unchanged during the May meeting. This impacted on domestic performance with the local share market continuing to fall. During the month we exited our position in Fletcher Building, on governance related screening.
Across the ditch, the Australian share market closed up just 0.5%, with softer business conditions weighing on performance as sales and profit growth slowed and cost pressures picked up somewhat.