Welcome to your August update
Dear member, welcome to the Lifestages KiwiSaver Scheme Investor Update for August 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 July 2024.
| Fund Option | 1M | 1Y | 5Y pa |
| High Growth Fund | 3.67% | 17.04% | 8.65% |
| Auto 0-49 Option | 3.67% | 17.04% | 8.65% |
| Auto 50-54 Option | 3.24% | 10.46% | 7.14% |
| Auto 55-59 Option | 2.81% | 8.47% | 5.57% |
| Auto 60-64 Option | 2.37% | 6.50% | 3.95% |
| Auto 65+ Option | 2.16% | 5.53% | 2.93% |
| Income Fund | 1.51% | 2.63% | 0.64% |
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
Almost all equity sectors and fixed interest segments were positive in July. This is great news for members, as both funds and each Lifestages Auto option posted a positive return for the month of July.
Performance was led by the domestic markets, with the NZ equity component of the High Growth Fund up around 5%. Across companies, performance was varied. However, Freightways, Summerset, Port of Tauranga, Mainfreight, and EBOS Group all delivered strong double-digit percentage returns.
Globally, company stock performance was more volatile. Shares in Tesla and Roche Holdings were up 20%, UnitedHealth Group 16%, while some were down around 3-5% (although most of these have greatly appreciated year to date).
Two recent investments also had a great month in July. Irish headquartered US firm Accenture, specialising in information technology services and consulting, was up 12%, and US company Thermo Fisher Scientific (global supplier of analytical instruments, clinical development solutions, specialty diagnostics, laboratory, pharmaceutical and biotechnology services) was up almost 14%.
As part of our investment strategy, we target certain long-term themes. Some of the High Growth fund’s theme holdings also performed well in July, with Healthcare Innovation up 10%, Global Clean Energy 9%, and Global Infrastructure 7%.
Long-term bond yields reduced a little in July, on the back of central banks in Europe starting to cut interest rates and hope that the US Fed and NZ Reserve Bank will do the same soon. This was positive news for the Income Fund, up 1.51% for the month.
We recently completed our 3-yearly “health check”, the Strategic Asset Allocation review – the good news was that the changes, being introduced from 1 September 2024, are minimal. We will be altering the benchmark for the High Growth Fund only slightly. The new benchmarks are International Equities 74% (72% current), Australasian Equities 24% (26% current), and cash 2% (no change).
No changes are being made to the Income Fund.