We continue to acknowledge that there may be some concerns around the October and November’s current market movements. It is understandably unsettling for some investors when funds go up and down but it’s important to remember that KiwiSaver is a long-term investment and therefore market movements are simply a normal part of investing and usually only temporary. It’s times like this that highlight the importance of having access to quality financial advice. 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.
October Market Commentary
October was a challenging month for global markets, as higher interest rates, US politics, and slower growth in Europe and Asia lowered investor confidence. This has impacted on many investments in New Zealand and internationally.
Both Australia and New Zealand sharemarket faced a weaker monthly performance with returns of -6.1% for Australia and -6.4% for New Zealand yet the New Zealand sharemarket remains ahead overall for 2018 with a 4.2% year-to-date gain. Global share markets continued to rise and fall with a return of -5.9% as the New Zealand dollar weakened against the US dollar.
Global and New Zealand property fell slightly compared to the broader sharemarkets. New Zealand property declined -3.4% for the month but remains up +4.0% year-to-date, while global property declined -3.2%.
The bond markets weak performance continued into October, with global treasuries flat for the month returning only 0.3% year-to-date, while New Zealand bonds managed a 0.4% return. This reflects a good financial outlook with the view that the Reserve Bank will leave interest rates unchanged until 2020.
Compared to the average return on the average term deposit for 1 year of 3.35% and 5 years of 3.90% (offered by the major banks as at 5 October 2018), the returns for some of our key funds were:
|Fund type||Return (1year)*||Return (5 years p.a.)**|
|AMP Growth Fund||1.87%||6.91%|
|AMP Balanced Fund||1.78%||6.01%|
|AMP Moderate Fund||1.73%||4.97%|
*October 2017 - 2018
**October 2013 - 2018
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, including a full allowance of any foreign tax credits.
The AMP KiwiSaver Scheme is a long-term investment and unless your individual circumstances have changed, this may not be the time to make decisions to change your funds.
You can view returns for all of the AMP KiwiSaver Scheme funds here.
If you have any questions you can talk with your Adviser or call us on 0800 267 5494.
A disclosure statement is available on request and free of charge from your Adviser.