Generate Fund Performance - October 2024

International Equities

World equity markets had a month of softer performance during October, with the market down -1.91% in local currencies. Performance was better in NZ Dollars, however, because the depreciating Kiwi more than offset this weakness, leaving global equities +4.86% in NZD terms. 

There were two dominant narratives in the month: earnings for most US companies, and positioning changes leading up to the US election that took place on November 5th. 

Our strongest performer in October was cruise operator Royal Caribbean that gained 16.3% after benefitting from a trifecta of rotations toward stocks that benefit from an acceleration in economic growth, the prospect of lower oil prices (a key cost component of operating cruises) under a Trump administration and reporting strong earnings late in the month.  B2B payments business Fiserv delivered an excellent set of financial results for a +10.2% gain, and our portfolios also benefited from renewed strength in semiconductor and AI-related stocks, including Nvidia (+9.3%), Taiwan Semiconductor (+9.7%) and data centre cooling supplier Vertiv (+9.9%). 

On the other side of the coin, healthcare insurer and operator Elevance delivered an underwhelming set of results, with higher costs for its Medicaid products for low-income consumers leading to a -22% fall over the month. Elevance has had a much stronger start to November, however, with a +5.5% return from what we believe was a very low valuation starting point. 

New Zealand & Australian equities

The New Zealand Stock Exchange experienced a satisfactory October, with the S&P/NZX50 returning 1.7% and the REIT (property) sector at 1.8%. Freightways (FRW), a key indicator of the NZ economy due to its diverse industry exposure, saw its shares rise 15.3%. At their annual general meeting, FRW reported no significant economic improvement but also no further decline, expressing hope for better trading conditions over the next 10 months. 

Ryman Healthcare, another strong performer, climbed 15.6%. This surge can potentially be attributed to two factors: investors' optimism that the economy has hit, or is close to hitting, its lowest point, with interest rate cuts potentially boosting house prices in the medium term, and a relief rally following RYM’s -11.3% share price decline the previous month. 

Conversely, Metcash Limited faced a challenging month on the ASX, with its share price dropping -14.5%. This decline was driven by a sales update indicating modest growth in grocery sales but slowing growth in the hardware sector. Persistently high costs, coupled with lower volumes, squeezed profit margins due to the fixed nature of its cost base. 

In summary, while some companies are beginning to become optimistic about the future amidst ongoing economic uncertainty, others struggled with the continuing challenges of higher costs and shifting market demand.  

Returns to the 31st of October 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 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 for KiwiSaver Funds and here for Managed Funds.

Top Holdings as of the 31st of October 2024

Generate total Funds Under Management (FUM) as of 31st of October 2024: $6,320,852,397.98