International Equities
March saw significant weakness in global equities as Trump’s whipsaw tariff policies created confusion and eroded confidence in equities. The US was hit especially hard with the S&P 500 falling -5.7% and the Nasdaq dropping -8.2%. The losses were even greater in local currency terms because the NZD strengthened materially against the USD.
Technology shares were in the firing line, not helped by reports that large companies were pressing pause on data centre expansion plans. This news triggered profit taking across some of the recent big winners in the AI space, including Nvidia, Broadcom and TSMC. Coupled with uncertainty over tariff policy, the spending outlook for the technology sector has certainly grown murkier in the near term.
In terms of Generate’s global holdings, our overweight to US equities has quickly turned from a tailwind to a headwind. While we have increased our exposure to the Asian region based on green shoots in the Chinese economy, our underweight to Europe negatively impacted our relative returns for the month.
The best performers for March were in the materials and healthcare sectors, with Alamos Gold (+17%), Cheniere Energy (+1.2%), and wholesale medicine distributors Cencora (+9.7%) and McKesson (+5.1%) bucking the negative trend. The worst performers were concentrated in the technology sector, with heavyweights such as Nvidia (-13.2%), Amazon (-10.4%) and Meta (-13.7%) weighing on returns.
While the tariff confusion looks set to continue for a while yet, there will come a point when the market has appropriately priced the risks. In the meantime, we are pouncing on opportunities to buy quality names at discounted prices with a view their quality will shine through over the long-term.
New Zealand & Australian equities
March was a tough month for global markets, and it was no different in Australasia. New Zealand‘s S&P/NZX50 and Australia’s S&P/ASX200 declined -2.6% and -3.2% respectively, caught in the wake of US headlines driven by President Trump’s tariff agenda.
Unsurprisingly then, global logistics company, Mainfreight (-11.6%), was the weakest performer in the Australasian portfolio. While the outcome from the US’ tariffs is uncertain, it is almost universally accepted that they are negative for global growth. With this as a backdrop, investors are feeling cautious over Mainfreight’s earnings outlook amidst a potential slowdown in global freight.
Other poor contributions came from Ryman Healthcare (-10.4%), predominantly driven by the company’s recent $1bn equity capital raise. Negative sentiment continues to persist towards the stock as the market digests the enormous dilution created, alongside a housing market that is unlikely to support meaningful sales growth in the near term. Ryman’s peers did not escape this sentiment, with Summerset and Oceania Healthcare also declining -7.8% and -9%, respectively.
The Australian REITs (or property) sector was a bright spot in the portfolio. While the market is not expecting a cut to the Australian official cash rate (OCR) in April, recent economic data suggested the Australian economy may be softening faster than expected. The softening Australian economy raises the chances of a cut to the Australia OCR over the next few months, giving interest-rate sensitive sectors some reprieve.
This was enough to support the REIT sector, and our holdings in Homeco Daily Needs (+0.9%) and Mirvac (+1.0%) benefited accordingly.
Returns to the 31st of March 2025
(after fees* and before tax)
Generate KiwiSaver Funds:
1 Month
1 Year
5 Year (p.a.)
10 Year (p.a.)
Since inception**
(p.a.)
Focused
Growth Fund
-5.65%
5.55%
10.76%
9.06%
9.46%
Growth
Fund
-4.49%
5.27%
9.77%
8.36%
8.66%
Balanced Fund^
-3.13%
5.14%
7.98%
Moderate Fund***
-2.14%
5.39%
5.57%
5.48%
5.48%
Conservative Fund^
-0.84%
6.01%
5.43%
Defensive Fund^
0.34%
6.75%
4.64%
Generate Managed Funds:
1 Month
1 Year
5 Year (p.a.)
10 Year (p.a.)
Since inception** (p.a)
Focused Growth Managed Fund***
-5.65%
5.49%
10.76%
7.66%
Balanced Managed Fund^
-3.21%
5.09%
8.04%
Conservative Managed Fund^
-0.85%
6.06%
5.38%
Thematic Managed Fund^^
-7.89%
9.20%
19.40%
Australasian Managed Fund^^
-2.74%
0.46%
3.10%
* 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 new funds in May 2022, our original Conservative Fund was 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.
Top Holdings as of the 31st of March 2025
International Equities
Amazon
Nvidia
Meta Platforms
Microsoft
Taiwan Semiconductor
External Managers
T Rowe Price Global Equity Fund
Te Ahumairangi Global Equity Fund
Worldwide Healthcare Trust
CIM Infrastructure III Fund
Nuveen ESG Small Cap ETF
Australasian Equities
Fisher & Paykel Healthcare
Infratil
Contact Energy
Auckland International Airport
Spark
Fixed Income
Local Government Funding Agency Bonds
Kāinga Ora Bonds
NZ Government Bonds
ANZ AUD Bonds
Westpac AUD Bonds