Returns to the 31st of May 2024
(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
2.64%
17.57%
8.49%
10.23%
9.69%
Growth
Fund
2.07%
14.23%
7.35%
9.29%
8.82%
Balanced Fund^
1.49%
10.76%
8.55%
Moderate Fund***
1.25%
8.74%
4.29%
5.71%
5.40%
Conservative Fund^
1.02%
7.40%
4.83%
Defensive Fund^
0.75%
6.26%
3.61%
Generate Managed Funds:
1 Month
1 Year
5 Year (p.a.)
10 Year (p.a.)
Since inception** (p.a)
Focused Growth Managed Fund***
2.62%
17.39%
7.93%
Balanced Managed Fund^
1.48%
10.80%
8.65%
Conservative Managed Fund^
1.02%
7.46%
4.43%
Thematic Managed Fund^^
5.21%
Australasian Managed Fund^^
-0.44%
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.
Generate’s fund updates can be found here.
International Equities
Global equity markets posted a solid month of gains in June (+2.1% in USD, +2.8% in NZD as measured by the MSCI World Index) fuelled by growing confidence in AI-related stocks.
While these gains are encouraging – and they led to gains for many of our investments (see below) – the fact that many stocks across the market didn’t show the same strength does warrant some caution. We are monitoring these developments closely and have made some adjustments to our portfolios to reflect them.
Semiconductor companies were the top performers in our global portfolios with Broadcom (+21.7%) being our best-performing stock whilst TSMC (+15.9%) and Nvidia (+12.7%) also delivered attractive returns. The stock prices for these companies gained over June as investors continued to raise their growth estimates for AI chip makers due to the enormous levels of AI-related investments being made by Big Tech companies. Enterprise software company ServiceNow also had a good month, gaining 20.2% in June to rebound from a weaker period in prior months.
Our worst performer during the month was UK-based payments business Wise, which lowered its margin guidance to levels that, we believe, are extremely conservative. We continue to hold our (relatively small) investment in the company.
New Zealand & Australian equities
June was another weak month for the local market with the S&P/NZX50 declining -1.3%. This performance was particularly weak compared to the Australian market, which rose 1% over the same period.
New Zealand companies exposed to discretionary consumer spending continued to come under pressure, with The Warehouse Group and Kathmandu both announcing another round of earnings downgrades. We are not invested in either of these companies.
The Australasian portfolio’s strongest performers for the month were Infratil (+7.1%), Insurance Australia Group (+7.4%), and National Australia Bank (+6.3%). Infratil’s performance was particularly impressive given the $1.15bn capital raise they successfully executed on 17-18 June. The capital raised by this issue will be used to fund growth opportunities in their infrastructure portfolio. For example, half of the $1.15bn will be deployed to a company called Canberra Data Centres, which is increasing its development pipeline and bringing forward new capacity development due to persistently strong demand for their leases. Infratil’s capital raise was well supported by the market with the share price closing 10% above the raise price of $10.15.
Insurance Australia Group (IAG) is a relatively new addition to the portfolio and has an appealing outlook. Late in the month, IAG released an update to the market announcing a new 5-year reinsurance deal with Warren Buffett’s Berkshire Hathaway. We believe the deal will benefit IAG over the long term by reducing catastrophe claim costs and stabilising future earnings.
Goodman Property trust (GMT) and Meridian Energy (MEL) were the portfolio’s largest detractors for the month, down -7.6% and -7% respectively. As discussed last month, MEL’s share price jumped strongly in May when they signed 20-year demand contracts with the Tiwai Point Smelter. MEL’s slide in June was likely due to investors locking in profits by selling some of their holdings after the market’s initial enthusiastic reaction. There was no substantive news from GMT to explain their decline.
Top Holdings as of the 30th of June 2024
International Equities
Amazon
Microsoft
Nvidia
Alphabet
Apple
External Managers
T Rowe Price Global Equity Fund
Te Ahumairangi Global Equity Fund
Worldwide Healthcare Trust
CIM Infrastructure III Fund
Magellan Global Fund (Closed Class)
Australasian Equities
Infratil
Fisher & Paykel Healthcare
Contact Energy
Spark
Auckland International Airport
Fixed Income
Local Government Funding Agency Bonds
Kainga Ora Bonds
NZ Govt Bonds
Westpac Bonds
ANZ Bonds