Returns to the 31st of March 2024 

(after fees* and before tax) 

Generate KiwiSaver Funds:

Generate Managed Funds:

Except for the $3 per member per month administration expense that is charged to KiwiSaver members.

** The Generate KiwiSaver Scheme funds opened on 16 April 2013. The Generate Focused Growth Trust opened on 1 November 2019.

***Following the launch of our new funds, the Conservative Fund has been renamed as the Moderate Fund and the Focused Growth Trust has been renamed as the Focused Growth Managed Fund.

^ these funds were established on 16 May 2022

^^ these funds were established on 3 July 2023

Past performance is not necessarily an indicator of future performance. Generate’s fund updates can be found here.

International Equities

Global equities climbed higher in March but there was a marked change in the composition of winners and losers compared to the AI-driven rally of the past 12 months. Europe was the strongest region, Energy was the best performing sector, and Small Caps outperformed Large Caps. Many market pundits have taken this as a sign that the rally is broadening beyond the Magnificent Seven, a healthy sign for the overall market, and this is supported by recent economic data that suggest the global economy, particularly the US, is in better shape than anticipated. The downside to a strong economy could be higher inflation and subsequently higher for longer interest rates, typically a negative for equities. But for the moment at least, markets are taking the renewed inflation threat in their stride.

Our global investments had a mixed month relative to the index as many outperformers over the past year fell victim to profit-taking, particularly in the consumer sector where earnings results failed to meet lofty expectations (Lululemon, Ulta Beauty). On the positive side, gold producer Agnico Eagle Mines rallied +24% after posting earnings and production growth that topped market expectations. Bank holdings such as Western Alliance, JP Morgan and Bank of America all performed well, helped by positive outlook commentaries from management teams at recent financials’ conferences. Alphabet also staged a comeback after enduring a selloff earlier in the year, as the market debated whether the stock will ultimately be an AI winner or loser. 

New Zealand & Australian equities

The local share market enjoyed a solid month of gains. The broad market index, the S&P/NZX 50, was up +3.1%, and the S&P/NZX Real Estate index gained +3.8%. Following the busy reporting season in February, news flow over the month in the local market was limited.

The strongest performer in March was retirement developer and operator, Arvida Group, which rose +14.4%. This was a welcome gain given Arvida’s poor start to the year. In late 2023, Arvida announced it had received a non-binding indicative offer a few months earlier. This saw Arvida’s shares perform strongly into the end of 2023, but as it became less and less likely the bidder would be back with a revised offer, Arvida’s share price slumped. As we approach the financial year end it seems the market is refocusing on the business' fundamentals, which should have improved modestly. 

The Australian Stock Exchange listed property company, Mirvac Group, was also a strong performer, appreciating +10.4%. During the month, a strong set of employment numbers saw the unemployment rate decline from 4.1% to 3.7%. This suggests the Australian economy is unlikely to slip into a recession.

The weakest performing stock was EBOS Group, which is a healthcare distribution company and animal care supplier. Some market participants are speculating that the company may exit the MSCI World Index at the end of May which, if correct, would see a number of large passive funds sell their shares. This has caused early selling pressure from speculators and has driven the share price decline of -7.3% in March.

Top Holdings as of the 29th of February 2024

Generate total Funds Under Management (FUM) as of 31st of March 2024: $5,346,227,383.62

Returns to the 30th of April 2024 

(after fees* and before tax) 

Generate KiwiSaver Funds:

Generate Managed Funds:

Except for the $3 per member per month administration expense that is charged to KiwiSaver members.

** The Generate KiwiSaver Scheme funds opened on 16 April 2013. The Generate Focused Growth Trust opened on 1 November 2019.

***Following the launch of our new funds, the Conservative Fund has been renamed as the Moderate Fund and the Focused Growth Trust has been renamed as the Focused Growth Managed Fund.

^ these funds were established on 16 May 2022

^^ these funds were established on 3 July 2023

Past performance is not necessarily an indicator of future performance. Generate’s fund updates can be found here.

International Equities

Global share markets (measured by the MSCI World Index) posted a weaker month in April (-3.7% in USD, -2.5% in NZD), pulling back after a strong first quarter in which they rose +9.1% in USD and +15.4% in NZD. This pullback was primarily driven by rising bond yields, which reduces the relative attractiveness of stocks compared to other investments, like bonds. We believe the rise in interest rates are mainly a result of economic strength in the US, rather than a cause for concern over the medium term. This view was supported by the recent US earnings season, in which most of the companies we own reported robust earnings results for the first quarter of the year. 

The best performers in our global portfolios in April were our two recent investments in Hong Kong listed stocks AIA Insurance (+10.0%), and Hong Kong Exchange (+10.4%). These are high quality businesses that have been caught up in concerns about China’s economy. While each business has some economic exposure to China, we invested in them earlier this year after concluding that their ~30% share price fall over the prior 12 months meant that their shares offered a compelling risk/reward opportunity. 

Google owner Alphabet was also a strong contributor to returns, rising +7.9% for the month. The market was encouraged by the company’s technical strengths in AI, and excellent financial results for the first quarter. 

Our worst performer during the month was Ulta Beauty, which fell -22.6% over the month after management suggested that growth was slowing down, and the company was losing market share. We have since sold out of our position in Ulta. 

New Zealand & Australian equities

April was a soft month for the local market with the S&P/NZX50 declining -1.2%. In aggregate, just a quarter of NZX50 stocks posted positive returns over the month as sharp declines in consumer discretionary stocks more than offset a strong performance by the healthcare sector. The S&P/NZX Real Estate index declined -2.7%, while the S&P/AXS200 (a broad measure of the Australian share market) dropped -2.9%.  

Fisher and Paykel Healthcare was the strongest contributor to the portfolio over the month, returning +11%. A handful of minor events drove this performance. First, the company released a new nasal pillow mask for the treatment of obstructive sleep apnea. Sales for this mask are already underway in New Zealand and a launch into the North American market is scheduled for later this year. Second, a local broker analyst upgraded their stock recommendation on the company from underperform to neutral. While interesting, the basis of this upgrade centred largely on potential earnings growth many years into the future from new anaesthesia products. Lastly, Fisher and Paykel earn much of their revenue in US dollars. Over the month the USD strengthened against the NZD by 1.5%, which means that the company’s offshore earnings translated into higher NZD earnings.  

Other notable movers were My Food Bag, a small position for the funds, which rose +7.6% in April without any notable news. Perhaps it was recovering from weak performance in the month prior. More meaningfully, Meridian Energy climbed +1.5% with speculation mounting that a long-negotiated power deal with New Zealand Aluminium Smelters is imminent. The deal is expected to raise the power price received by Meridian for supplying the smelter’s energy. 

Mirvac Group underperformed in April, declining -12.7%. Australian listed real estate was particularly out of favour last month with the S&P/ASX Real Estate Investment Index index declining -7.8% over the month. A second detractor came from the portfolio’s holding in Ryman Healthcare. Readers may recall that Ryman produced a particularly poor market update in February, which set the tone for weak trading. Ryman’s CEO then abruptly resigned in late April, compounding the market’s already negative sentiment. Ryman’s Chairman will act as Executive Chair while the Board looks for a new CEO. Ryman also reaffirmed their February issued earnings guidance in the announcement. 

Top Holdings as of the 30th of April 2024

Generate total Funds Under Management (FUM) as of 30th of April 2024: $5,221,411,842.22