Performance update, December 2020
European markets rose by 2.3% for the December month. The UK share market rose by 4.6%, despite Covid-19 lockdowns and last-minute trade negotiations at the end of Brexit transition period. This is a surprise given the deteriorating Covid-19 situation in the United Kingdom due to a new viral variant. Meanwhile, emerging share markets once again produced strong monthly returns and rose by 7% in the month.
The US share market rose by 3.1%. Political uncertainties remained, leading up to the eventual departure of Donald Trump from office, before President-Elect Joe Biden is inaugurated on 20 January 2021. As the holiday season advanced, investors generally focussed more on positive developments than on political issues.
The New Zealand share market rose by 2.6%, while the Australian share market rose by 2.5%. Although the New Zealand share market did not rise as much as the global share market, it’s growth still reflected an overall positive New Zealand investor sentiment.
The Reserve Bank of New Zealand continued to keep interest rates low. The New Zealand dollar rose more than 2.5% against the US dollar, reflecting the decreasing likelihood that the Reserve Bank will introduce a negative Official Cash Interest rate in 2021.
Government bonds, both in New Zealand and internationally, remain a popular central bank tool to support economic stimulus. We expect the extremely easy monetary policy set by New Zealand’s Reserve Bank and overseas central banks to continue for the foreseeable future. Monetary authorities do not want to risk reducing activity in their economies already hit hard by demand and supply shocks arising from Covid-19.
We can expect the market ups and downs to continue for some time. It’s helpful to remember that KiwiSaver is an investment, and market movements are a normal part of investing.
It’s important to keep your financial goals in mind when you’re thinking about investments, including your KiwiSaver account. That’s why making sure you’re in a suitable fund is important, and if you are, hang in there, as for most members KiwiSaver is a long-term investment.
One of the benefits of being with a full-service provider like AMP is that we have a team of experienced advisers who can help you make sense of what’s going on. We can also talk to you about getting a plan in place to help you get on track with your KiwiSaver – we’re here to help.
You can view returns for the AMP KiwiSaver Scheme here.
You can view returns for the NZ Retirement Trust here.
The information included in this article is of a general nature and is not a substitute for financial or other professional advice. To the extent that the information constitutes advice, it is class advice only. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. For personal financial advice, we recommend you contact your Adviser or if you don't have an Adviser, contact us on 0800 267 263 and we can put you in touch with one. A disclosure statement is available from your Adviser, on request and free of charge .
AMP KiwiSaver Scheme
AMP Wealth Management New Zealand Limited is the issuer and manager of the AMP KiwiSaver Scheme (the 'Scheme'). The Supervisor of the Scheme is The New Zealand Guardian Trust Company Limited.
For more information, download a copy of the AMP KiwiSaver Scheme Product Disclosure Statement and Fund Update Booklet, which have been lodged on the Scheme's offers register entry at companiesoffice.govt.nz/disclose.
New Zealand Retirement Trust
For more information, download a copy of the NZRT Product Disclosure Statement (Workplace or Personal sections) and Fund Update Booklet. AMP Wealth Management New Zealand Limited is the issuer and manager of the New Zealand Retirement Trust. The Supervisor is the New Zealand Guardian Trust Company Limited.
While care has been taken to supply information in this article and on this website that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.