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AMP KiwiSaver Scheme performance update – January

Markets in January have rebounded and provided a break from challenging times

The month of January has provided relief for investors globally, as US-China trade relations have improved with a more patient US Federal Reserve looking to slowly raise interest rates. Global share markets have bounced back with international investments outperforming New Zealand ones. Although there remains some political uncertainty, the central banks have taken a careful wait and watch approach regarding policy changes in 2019. These changes certainly project a more positive outlook in the global share markets for rest of the year.

KiwiSaver is a long-term savings plan. If you would like more information or to discuss whether you’re in the right fund to suit your savings needs, please talk to your Adviser or call us on 0800 267 5494.

How do the latest returns compare to the average term deposit?
Compared to the average return on the average term deposit for 1 year of 3.42% and 5 years of 5.29% (offered by the major banks in New Zealand as at 26 January 2018 and 31 January 2014 respectively), the returns of some of our key funds were:

Fund type Average annual return over past 1 year* Average annual return over past 5 years**
AMP Growth Fund -0.37% 7.25%
AMP Balanced Fund 0.55% 6.31%
AMP Moderate Fund 1.44% 5.20%

* 31 January 2018 - 31 January 2019
** 31 January 2014 - 31 January 2019

These returns are after total fund charges and before tax and are calculated based on unit price movements adjusted by total fund charges and tax credits and including a full allowance of any foreign tax credits.

You can view returns for all the AMP KiwiSaver Scheme funds here.  
If you have any questions you can talk with your Adviser or call us on 0800 267 5494.

Detailed commentary

Global markets rebounded last month, a welcome respite in January after a very weak close to 2018. Both developed and emerging market equities gained over 7% in local currency terms, boosted by signals from the US Federal Reserve (Fed) that it would be more patient with further interest rate rises, as well as by improving White House negotiations with China. Growth assets like equities and listed infrastructure recovered some of the losses they made in the fourth quarter of last year. World equities surged by 7.7%, while NZ equities managed a gain of only 2% in January, reflecting the fact they had not been as weak as international markets in December. Political uncertainty remains a headwind, and recent economic releases continue to send mixed signals about the outlook for the global economy. Central Banks are now sounding more careful, to avoid triggering any major panics in asset markets, and will likely move slowly on policy changes in 2019. That makes us more positive on world equity markets’ outlook.

The recent quarter’s disappointing performance is due to the extreme volatility prevailing in financial markets into year-end, which saw most global growth asset classes recording negative returns, while New Zealand assets were more resilient, undergoing moderate declines rather than the severe and concentrated sell-offs seen offshore.

Domestic assets were among only a handful of investments to display positive December returns, rewarding more domestically-focused KiwiSaver funds. This pattern reversed in January, with international assets clearly outperforming NZ. As our AMP KiwiSaver Scheme funds hold a broad range of global assets, many of which are performing better following the recent corrections, we expect this positive 2019 performance trend to continue.

A disclosure statement is available on request and free of charge from your Adviser.

*Please note past returns are not indicative of future returns. 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.New Zealand/disclose. AMP Wealth Management New Zealand Limited is the issuer and manager of the Scheme. The Supervisor of the Scheme is The New Zealand Guardian Trust Company Limited.

Important information

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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.

Please note past returns are not indicative of future returns.

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.

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.