Welcome to your July update
Dear member, welcome to the Lifestages KiwiSaver Scheme 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 |
| High Growth Fund | 2.14% | 15.32% | 8.27% |
| Auto 0-49 Option | 2.14% | 15.32% | 8.27% |
| Auto 50-54 Option | 1.86% | 13.15% | 6.80% |
| Auto 55-59 Option | 1.31% | 10.96% | 5.25% |
| Auto 60-64 Option | 0.31% | 8.80% | 3.67% |
| Auto 65+ Option | 1.17% | 7.72% | 2.66% |
| Income Fund | 0.76% | 4.51% | 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
The Lifestages High Growth Fund had a great month returning 2.14% driven largely by strong share markets. However, not all regional markets performed similarly. 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 valuation 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, it was a tougher month 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.
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.
Closer to home the NZ fixed interest market also provided a positive return. This led to the Lifestages Income Fund delivering 0.76% for the month.