Welcome to your November update
Dear member, welcome to the SBS Wealth KiwiSaver Scheme Investor Update for October 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 October 2024.
| Fund Option | 1M | 1Y | 5Y pa |
| High Growth Fund |
1.28% |
27.51% |
8.24% |
| Auto 0-49 Option |
1.28% |
27.51% |
8.24% |
| Auto 50-54 Option |
0.86% |
23.50% |
6.83% |
| Auto 55-59 Option |
0.44% |
19.58% |
5.32% |
| Auto 60-64 Option |
0.02% |
15.75% |
3.79% |
| Auto 65+ Option |
-0.19% |
13.87% |
3.79% |
| Income Fund |
-0.82% |
8.39% |
0.63% |
The Lifestages Auto Options invest in combinations of the SBS Wealth High Growth Fund and the SBS Wealth 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
October was a mixed bag with equity markets in general negative. The largest market, the US, was down around 1%, on the back of uncertainty ahead of the presidential election and doubts about the path of interest rates. Europe was down 2%, amid some concerns about growth, notably in IT, consumer staples and real estate. Asia was down 5%, amid fears of an escalation in the conflict in the Middle East, which could lead to potential disruptions in the supply of oil, and stimulus measures by the Chinese government, in a bid to boost the country’s flagging economy. Australia was down 1%.
Bucking the trend was Japan up 2%, on the back of support for large cap exporters such as technology, autos and machinery stocks, and NZ up 1.7%.
The full impact of this for your KiwiSaver Scheme was offset by a strong US dollar (anticipating a Republican win), which added 6.5% to the US stocks return, and a strong Australian dollar, adding 1% to the Australian stocks return. The Scheme hedged half of this exposure so benefited by half of this.
October was also a challenging month for fixed interest as most of the major government bond markets sold off over the month. Rising interest rates led to negative valuations for NZ fixed interest, -0.7% and global fixed interest –1.5%. Inflation figures globally, came down slightly, which is good news for markets. However, markets are cautious that they could potentially climb higher in the months to come.
Within the High Growth Fund, the performance of underlying stocks was also mixed. Nvidia was up another 17%, Freightways up 15%, JP Morgan, Bank of America, and Visa, all up 13%, Alphabet 10%, Walmart. Mastercard and iShares Digitalisation ETF all up 8%.
The strong performance of our technology stocks and financial services stocks, coupled with the strong US dollar led to the High Growth Fund returning a positive 1.28% for October, and an impressive 27.5% for the last twelve months.
Even though global fixed interest markets were down 1.5% for the month, the Income Fund helped protected members, holding over 25% of the fund in shorter dated fixed interest and 25% in New Zealand fixed interest. This led to a return of –0.82% for October and 8.4% for the twelve-month period.