Welcome to your July update
Dear investor, welcome to the SBS Wealth Investment Funds Investor Update for July 2025. Below you will find the latest performance data and market commentary from your SBS Wealth Investment Management Team.
To see your performance, log in to our new app experience.
Performance data
Performance as at 30 June 2025.
| Strategy | 1M | 3M | 1Y |
| High Growth Strategy | 2.21% | 4.55% | 9.79% |
| Growth Strategy | 1.91% | 3.89% | 8.95% |
| Balanced Strategy | 1.61% | 3.22% | 8.06% |
| Conservative Strategy | 1.15% | 2.20% | 6.63% |
| Portfolio | 1M | 1Y | 5Y pa |
| World Equity Portfolio | 2.35% | 10.58% | 12.47% |
| Australasian Equity Portfolio | 1.79% | 7.27% | 5.01% |
| World Bond Portfolio | 0.71% | 4.28% | 0.09% |
| New Zealand Bond Portfolio | 0.69% | 6.84% | 0.83% |
Performance is shown after fees and before tax. For more information about how performance is calculated and more performance periods, click here.
Market update
Equity markets in June continued their positive returns from May, making for a very good second quarter of 2025. The suspension of the earlier announced US trade tariffs and the fear of recession receding were the catalysts for strong equity markets across the globe.
US stockmarket gains were led by the information technology and communication services sectors, as investor appetite for some of the ‘magnificent 7' stocks reignited. Stocks with exposure to Artificial Intelligence also staged a strong recovery, offsetting losses earlier in the year. Healthcare was one of the few sectors that underperformed in the quarter, as the Trump administration seeks to lower drug prices in the US. In Europe it was the Industrial sector that led the way, on the back of defence stocks good performance amid an agreement at the NATO summit for countries to lift defence spending. Two rate cuts by the European Central Bank (ECB) in the quarter was also good news for European equities. Japan and Asia posted good equity market returns in June. In fact, Japan outperformed most other markets. Full-year company results were good, shareholders dividends increased, and buybacks rose significantly, reflecting ongoing corporate governance reforms and support for the sharemarket.
Generative AI is one of the key investment themes for SBS Wealth this year. We believe this will create a positive disruption to companies, and particularly those companies that embrace AI. We are also positioned to benefit from sub themes like semi-conductors and networking, which benefit from the supply side of AI. The SBS Wealth KiwiSaver Scheme performance benefited from a relatively high exposure to this investment theme in the June quarter.
Closer to home the Reserve Bank of New Zealand (RBNZ) just recently kept the OCR at 3.25%, although signalled there could be another 0.25% reduction in August. The market reaction to this has been muted.
The World Equity Fund backed up the 4.64% return from May with another 2.35% in June. The strong performance from the US information technology stocks and AI exposed stocks were a big benefit to the Fund’s return, as was exposure to emerging markets and communication services sector.
Standouts within the fund for June were the world’s second largest semi-conductor company Taiwan Semiconductors Manufacturing Corporation +16%,the world’s largest semi-conductor company Nvidia +15%, communications company Meta (Facebook) +12%, a leading manufacturer of construction company (helping customers build a better, more sustainable world and contributing to a reduced-carbon future) Caterpillar +10%, Cisco Systems (specialising in networking hardware, software, telecommunications equipment, and high-technology services) +8.2% and the world’s largest bank JP Morgan Chase +8%.
The Australasian Equity Fund backed up the 4.33% return from May with another +1.79% in June. The New Zealand sharemarket performed better than its Australian counterpart. Spark was one of the top performers in June +9%. Spark may be finally turning around a year of very poor results and performance. Speculation concerning Spark’s datacentre strategy and business partner are the likely reason for the rise in June, plus it has sold has stake in Hutchinson Telecommunications for $47 million, with the proceeds being used to reduce debt. Other stocks to perform well in June were Meridian Energy +7.6%, Macquarie Group +7%, and Commonwealth Bank Australia +5.3%.
The World Bond Fund returned +0.71% for June, more than offsetting the May return, and providing members a return of 1.13% for the June quarter. Many major central banks continued to cut interest rates, including ECB, Bank of England, Reserve Bank Australia and RBNZ. The Fund benefited from this through its iShares Global Aggregate Bond ESG exposure, the Dimensional Global Bond Sustainability PIE and the Harbour Core NZ Fixed Interest Fund. However, there are talks now that cuts are coming to an end.
The New Zealand Bond Fund returned +0.69% for June, more than offsetting the May return. The Reserve Bank of New Zealand reduction in OCR at the end of May was positive news for the fund. Also, the recent announcement by the RBNZ to keep the OCR aty 3.25% will be good news for the income stream coming through in July. The RBNZ forecasts maybe one more cut in August this year.