Investment returns (before tax and fees)* for the quarter ending 31 December 2022 are:

Fund 3 months 1 Year (p.a.) 3 years (p.a.) 5 years (p.a.) 10 years (p.a.)
Growth Fund 2.0% -4.1% 5.8% 7.3% 8.1%
Balanced Fund 1.6% -4.5% 3.6% 5.2% 6.5%
Income Fund 0.8% -4.4% -0.3% 1.1% 2.4%

* rounded to one decimal place.


The final quarter of 2022 was better, despite investors questioning the strength of the economic outlook and how many more increases in interest rates might be needed to lower inflation.

However, as most people know, 2022 was not a good year overall for investors. Share markets fell, and interest rates rose strongly. Rising interest rates, which reflected inflation concerns, led to falling bond prices and therefore declines in the value of income funds.

Inflation concerns gathered steam over 2022 in the wake of the sad war in Ukraine and the lingering COVID influences. The increases in the cost of living and inflationary concerns were front and centre in most governments’ minds. The major central banks worldwide sought to fight concerns about rising living costs by raising the interest rates of securities in their control. Central bank actions, in turn, raised interest rates within their respective economies.

Where to from here? This year, barring any geo-political flare-ups, has begun with a continuation of the inflation concerns seen in 2022. Questions include, “have interest rates risen enough?” and “do current share prices correctly represent future economic activity?” We cover more detail in our Investment Outlook article for 2023, which you can read here.

We bought a small number of fixed-income securities recently, taking advantage of the better prices on offer. However, given the highly uncertain outlook, we remain cautiously invested and diversified and continue holding higher-than-normal cash amounts.