The September quarter was another positive one for our diversified fund investors. Bonds produced healthy returns with low global inflation, policy easing from the European Central Bank and ongoing Ukraine concerns keeping yields well bid. Share markets inched higher over the quarter assisted by solid earnings both here and offshore. New Zealand shares outperformed global shares with no change of government removing the uncertainty risk premium. However, shares have entered a flatter and more volatile return profile recently. This is something we expect to persist given uncertainty over the path of US rate tightening and ongoing geopolitical tensions. The New Zealand dollar was sharply lower over the quarter on another large decline in dairy prices plus intervention in the currency market by the Reserve Bank of New Zealand. Improved global sentiment on the US dollar also contributed to the weaker New Zealand dollar over the quarter.
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