Welcome to your July update
Dear investor, welcome to the Lifestages Investment Funds Investor Update for July 2024. Below you will find the latest performance data and market commentary from your SBS Wealth Investment Management Team.
Performance data
Performance as at 30 June 2024.
| Fund Option | 1M | 1Y | 5Y pa |
| World Equity Portfolio | 2.84% | 17.78% | 11.08% |
| Australasian Equity Portfolio | 0.38% | 1.33% | 3.08% |
| World Bond Portfolio | 0.81% | 3.75% | -0.31% |
| New Zealand Bond Portfolio* | 0.83% | 5.98% | 0.33% |
* Previously Corporate Bond Portfolio
Performance is shown after fees and before tax. For more information about how performance is calculated and more performance periods, click here.
Market update
Global equity markets overall were positive in June, with World Equity Portfolio up 2.84% for June. However, there was a disconnection across markets. The US equity market remained strong, up around 3.6%, and for the first time in its history, the S&P 500 closed above 5,500. A number of other regions were negative, notably Europe, Japan, and New Zealand.
The US mega cap stocks led the way with Apple up 10.7% on the launch of its AI application during the month. Tesla was up 12%, on better than expected vehicle production, while Nvidia continues its amazing run, up another 13.6%, and reaching $3 trillion in market capitalisation to become the biggest listed company in the world. Amazon was up 10.4%, crossing the $2 trillion stock market value, while Meta was up 9%.
Around the rest of the globe, Novo Nordisk continues to make rapid advances with its obesity drugs, up 6.4%, as do semiconductor companies Taiwan Semiconductors +16.4% and ASML +7.4%.
Emerging Markets bounced back during June, led by strong returns from Taiwan, India and Korea (led by large IT companies exposed to artificial intelligence).
Domestically, the Australasian Equity Portfolio was up 0.38% for June. It was tough for NZ equities, with the market down 1.3%. Inflation is not coming down as fast as other countries, keeping interest rates up, thus affecting utility companies (Meridan –7%), and property companies (Goodman –7.5%, Precinct –4.3%). The fund did well, avoiding the worst market performers (Sky City, Kathmandu, Fletcher Building and A2 Milk).
Across the ditch, the Australian share market closed up 1%, driven by the top 20 companies, in particular, the Financial sector, Consumer Staples and Healthcare. An allocation of around 36% to Australian companies was a big benefit for investors.
During June we started to see some central banks start to reduce interest rates (European, Switzerland, Canada), the first signs that the bond market may have peaked. Globally fixed interest markets were up 0.9%. Hawkish comments from the Fed Governor led yields on longer-term US treasuries to rise, thus abating some of the good inflation news around parts of Europe. The World Bond Portfolio returned 0.81%, holding a slightly lower duration to reduce volatility for investors.
Closer to home the NZ corporate bond market returned 0.8%. This led to the Corporate Bond Portfolio returning 0.83% for the month. At the end of June, the fund was renamed the New Zealand Bond Portfolio. In early July, the fund’s underlying investments moved from 95% invested in NZ corporate bonds to around 60% with the remainder now invested in NZ government stocks. This should provide a more diversified portfolio, and more avenue to generate income returns.