Welcome to your September update
Dear investor, welcome to the SBS Wealth Investment Funds Investor Update for September 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 August 2024.
| Fund Option | 1M | 1Y | 5Y pa |
| World Equity Portfolio | -1.18% | 17.57% | 11.16% |
| Australasian Equity Portfolio | 0.03% | 7.81% | 3.65% |
| World Bond Portfolio | 0.79% | 5.74% | 0.63% |
| New Zealand Bond Portfolio* | 0.89% | 9.10% | 1.09% |
* 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
Fixed interest markets were up for the month of August. The focus on the imminent start of interest rate cuts by the US Fed led to a positive return, in particular US bonds, but also global bond markets generally. We also saw the start of rate cuts by the Bank of England. This led to a healthy return for the World Bond Portfolio of 0.79%.
During the month we saw the first interest rate cut by the Reserve Bank of New Zealand since March 2020. The RBNZ reduced the Official Cash Rate (OCR) 0.25% to 5.25%. This was taken positively by the fixed interest market with the New Zealand Bond Portfolio returning 0.89% for the month.
The mayhem in the Japanese equity market, on the back of the “yen carry trade” due to the Bank of Japan raising its policy interest rate at the end of July, created turbulence in other global markets. However, the market sharply rebounded on the following day. By the end of the month equity markets were positive again.
The positive global equity markets reported return in NZD was greatly reduced due a strong New Zealand dollar. This led to the World Equity Portfolio reporting a negative return in NZD of 1.18% for August.
Closer to home Fisher & Paykel had a great month and is now double the market capitalisation of the second biggest listed company in New Zealand. The real estate sector also had a good month locally, notably Precinct and Kiwi Property. The Australian stocks detracted a little bit of value, again mainly due to a stronger New Zealand dollar versus the Australian dollar, with the Australasian Equity Portfolio returning 0.03% for August.
The defensive strategies performed better in August, on the back of a higher allocation to fixed interest. The Conservative Strategy returned 0.32% with the returns reducing as the equity allocation within the strategy increases. Balanced Strategy returned –0.20%, Growth Strategy –0.54% and the High Growth Strategy, with 100% allocated to equities, returning –0.88%. All returns are after fees and before tax.