A year of surprises and resilience
Wow, what a year it’s been! When 2024 started, markets were looking pretty shaky - high inflation, rising interest rates, and concerns about a global recession. But as the year progressed, we saw some unexpected twists. The U.S. economy remained resilient, and the buzz around artificial intelligence (AI) really took off, helping some of the world’s biggest tech companies perform far better than most expected. The U.S. share market, especially tech-heavy stocks, such as Nvidia, Microsoft, Apple and Meta ended up being some of the top performers of the year. But it wasn’t just the big players that shined. Small-cap stocks, or smaller sized companies such as those that make up the Russell 2000 Index, and listed infrastructure, also showed growth and resilience over the year. This was largely driven by a shift in investor focus towards companies and sectors that are more sensitive to changes in interest rates and economic cycles.
Here in New Zealand, we had some surprises too. The Reserve Bank cut interest rates more than expected, thanks to falling inflation with the Official Cash Rate (OCR) cut by 125 basis points during the year to 4.25%. Along with growing consumer and business confidence in the latter half of the year, provided the New Zealand share market with a boost.
But it wasn’t all smooth sailing. There was plenty going on globally. The U.S. election, ongoing geopolitical tensions, and market volatility. China, in particular, introduced a range of policies to try and stabilise its struggling property market.
How we positioned our KiwiSaver portfolios for strong performance in 2024
Navigating these uncertainties while closely monitoring economic and corporate performance was crucial for Aurora Capital and our fund managers. Despite the challenges, many markets remained resilient throughout the year, highlighting the benefits of our diversified investment approach in navigating uncertainty and capturing opportunities.
As a result, you may have noticed your KiwiSaver account has performed strongly over 2024. Year-on-year, the Aurora Growth Fund returned 13.9%, the Conservative Fund 6.4% and the Liquidity Fund 5.4%.
So, how does Aurora help drive strong results? Our approach focuses on active asset allocation decision making, and our strategic mix of best-in-class fund managers who also actively manage the assets in each asset class. By spreading investments across different asset classes, countries, and sectors, we aim to reduce volatility and create a smoother investment journey for you. The idea is simple: when one asset takes a hit, another may rise, which can help cushion the blow.
But it’s not just about diversifying where we invest, it’s about who’s managing those investments. Each fund manager we select is carefully chosen for their unique investment style, with different drivers and portfolio characteristics. This diversity allows us to adapt to changing market conditions while keeping our focus on long-term growth. By combining all this expertise, we ensure your KiwiSaver investment is not only well-positioned for growth but also built to withstand market ups and downs with greater resilience.
Want to know more?
You can read our latest quarterly report here.
DISCLAIMER
This information is provided in a general nature only and should not be construed as or relied on as financial advice. This is not a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any investment decisions.
Past performance is not a reliable indicator of future performance. The value of your investment may go up and down.