Welcome to your October update
Dear investor, welcome to the SBS Wealth Investment Funds Investor Update for October 2025. Below you will find the latest performance data and market commentary from your SBS Wealth Investment Management Team.
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Performance data
Performance as at 30 September 2025.
| Strategy | 1M | 3M | 1Y |
| High Growth Strategy | 3.20% | 7.94% | 14.97% |
| Growth Strategy | 2.73% | 6.68% | 12.69% |
| Balanced Strategy | 2.26% | 5.40% | 10.36% |
| Conservative Strategy | 1.53% | 3.48% | 6.82% |
| Portfolio | 1M | 1Y | 5Y pa |
| World Equity Portfolio | 3.65% | 17.65% | 13.13% |
| Australasian Equity Portfolio | 1.84% | 7.03% | 5.18% |
| World Bond Portfolio | 0.59% | 2.10% | 0.00% |
| New Zealand Bond Portfolio | 1.26% | 5.85% | 1.13% |
Performance is shown after fees and before tax. For more information about how performance is calculated and more performance periods, click here.
Market update
What happened in the markets
The last quarter was a strong one for the Investment Funds, especially those investors in the funds/strategies with a high allocation to equities. Those investors that have remained invested in growth assets, through the World Equity Fund or the Australasian Equity Fund, have recovered from early year wobbles around Liberation Day, now seeing their savings go up close to 10% for 2025.
The strong gains in equities have been driven by robust artificial intelligence and technology demand, solid corporate earnings, and a well-anticipated Federal Reserve (Fed) rate cut. A weaker US dollar also supported emerging markets. Credit and fixed income, particularly in New Zealand, also performed well. The US & UK technology and communication services sectors (AI Boom), European financials and healthcare sectors (strong corporate earnings), and UK materials (higher gold prices) were the leading sectors for the strong equity market returns in Q3. The Japanese equity market advanced strongly with cyclical sectors and semiconductor related stocks benefiting from global AI demand, higher commodity prices, and robust corporate results.
Emerging Markets were the strongest performing region in Q3. This was driven by the index heavyweights China (US-China trade talks progressing and continued focus on their anti-involution policy), Taiwan (against a backdrop of ongoing strength in technology stocks and continued demand for artificial intelligence), and Korea (similar to Taiwan).
The markets are optimistic that further rate cuts by the Fed will occur in coming months, before year end.
What happened in our Funds
The World Equity Fund returned 3.65% for September and 9% for the quarter. The strong performance was on the back of the technology demand and continuing AI demand. The Fund is heavily allocated to this sector (around 30% of the Fund). The other region to perform well was Emerging Markets, where the Fund’s 5% allocation (managed by Schroders) returned 8.2% for September.
The top performing stocks in September were Dutch semiconductor company ASML 32.5%, Taiwan Semiconductor Manufacturing Company 23.3%, Alphabet (Google) 16.1%, Caterpillar 15.7%, Schneider Electric 15.4%, United Health 14%, Apple 11.5%, Global Clean Energy 9.3%, and Nvidia 8.9%.
The Australasian Equity Fund returned 1.84% for September and 4.78% for the quarter. The New Zealand market performed stronger than the Australian one, although a weaker Australian dollar benefited returns when converted back to NZ dollar. Real estate and industrial sector stocks performed better than healthcare, financial and consumer staples sectors.
Small capitalisation stocks outperformed the larger cap stocks. The Fund benefited from this by it 17% allocation to the Dimensional Australian Sustainability Fund, which targets the smaller cap premium. This underlying fund returned 3.4% for September. Individually the top performing stocks were Freightways 15.4%, Infratil 8.7%, Port of Tauranga 8.1%, Precinct Properties 6.6%, and Auckland International Airport 5.6%.
The World Bond Fund returned 0.59% for September, and 0.87% for the quarter. The Fund continues to benefit from central banks lowering cash rates. During September the Fed started cutting rates with a 0.25% cut and signalling more in Q4. It was also a positive quarter for credit markets. US investment grade spreads tightened further, outperforming government bonds. The Fund’s global bond managers allocate over half of their exposure to credit, thus benefiting from this tightening.
Global bond markets weren’t as positive as eurozone yields and Japanese yields ended the month higher. The European Central Bank (ECB) ended its rate-cutting cycle, as did the Bank of Japan (BoJ).
The New Zealand Bond Fund had another very good month returning 1.26% for September and 3.02% for the quarter. The Fund continues to benefit from the Reserve Bank of New Zealand lowering interest rates, reducing the OCR by 0.25% in September, and signalling more to come in Q4.
