Welcome to your June update
Dear investor, welcome to the Lifestages Investment Funds 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 |
| World Equity Portfolio | 2.10% | 20.07% | 11.43% |
| Australasian Equity Portfolio | -0.63% | 2.16% | 3.60% |
| Corporate Bond Portfolio | 0.71% | 4.68% | 0.25% |
| World Bond Portfolio | 0.72% | 3.22% | -0.30% |
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 across both equities and fixed interest.
Returns within World Bond Portfolio were driven by movements in overseas interest rates, as rate cut expectations continued to be moderated from earlier expectations of more cuts to the now “higher for longer” narrative. This news also moved the NZ fixed interest market, benefiting the Corporate Bond Portfolio.
US equities produced most of the gains within the World Equity Portfolio despite progress on inflation stalling (Nvidia +26%, Apple +13%, Walmart +11%). 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 World Equity Portfolio 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 the Australasian Equity Portfolio performance with the local share market continuing to fall (Spark –12%, Summerset –14%). The utility sector bounced back over the month, in particular Meridian Energy +13% and Contact Energy +6%. 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. Technology stock Xero +9% was our standout for May.