September was another bumper quarter for investment returns. Equity markets continued to soar with the NZ and global share portfolios returning 7.4% and 7.3% respectively for the quarter. The performance of the lower risk bond portfolios was more mixed but with small positives still being achieved. This all means that the Growth and Balanced Funds performed more strongly than the Income Fund in the September quarter.
Investment returns at 30 September 2018, before fees and tax:
| Fund | 3 months | 1 Year (p.a.) | 3 years (p.a.) | 5 years (p.a.) |
| Growth Fund | 4.1% | 13.1% | 11.8% | 10.9% |
| Balanced Fund | 2.9% | 9.2% | 9.0% | 8.6% |
| Income Fund | 0.5% | 2.5% | 3.9% | 4.5% |
Post-September we have seen some significant gyrations in market performance. October has sometimes been a more volatile month for stocks and 2018 was no exception. Exactly what drove a significant downward adjustment in equity markets is open to debate, but fingers generally point to increased concerns about global trade, European and emerging markets uncertainty and an increase in worry about global growth prospects, inflation and rising interest rates. The early part of November has seen some reversal of this impact. However, the volatility continues and we imagine it could become a regular feature in markets.
We will continue to keep an eye on the situation and remain vigilant. We do not consider it necessary to alter our investment strategy at this point but will if we perceive things have changed and consider it desirable to act.
It is tempting for members to react when market volatility increases. Unfortunately, that’s not always a good idea and we encourage you to look through short term movements. However, what is good to do from time to time is to check you are in the right fund for your risk appetite and the length of time you have until retirement.
