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:

Generate Managed Funds:

** 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 March 2025

Generate total Funds Under Management (FUM) as of 31st of March 2025: $6,685,841,128

International Equities 

World equity markets had a very volatile month in April yet ultimately ended slightly higher (+0.9%) in USD terms, while falling (-5%) in NZD as the Kiwi gained materially during the month.

The story of the month was the continually evolving nature of President Trump’s tariffs plan, from the sell off following their initial announcement on April 2nd, to an initial rebound after the 90-day delay was announced on April 8, and then a strong finish to the month with 8 consecutive days of gains on the S&P 500.

Our best performers for the month were companies that gained after strong earnings reports. Vertiv, which makes cooling equipment for data centres, gained 18.3% in April, and Amphenol, which makes electrical connectors that are also used in data centres, rose +17.3% as the company recaptured its all-time-high price after a weaker start to the year. Amongst our diversified holdings, we also saw good gains from European eCommerce logistics business InPost (+9.6%), gold miner Newmont (+9.1%), Constellation Software (+9.0%), and pharmaceutical company Eli Lilly (+8.8%).

Our weakest performer was Pinterest (-21.4%), which sold off on recessionary fears. Similar internet advertising companies like Alphabet and Meta have reported good results for Q1 so far, and we await Pinterest’s results later this month.

New Zealand & Australian equities

April was another challenging month as global markets continued to navigate uncertainty surrounding US trade policies and growing recessionary fears. Australian equities appeared to weather global growth risks relatively well, with the S&P/ASX200 increasing by +3.6% over the month. Relative outperformance was attributed to Australia’s strong economic ties to Asia, with only 11% of ASX 200 revenue coming from the U.S. over the past year.

Domestically, it was another story with the S&P/NZX declining by -3%. This was partly off the back of weak economic news following the pre-budget speech made by the finance minister in the last week of the month.

One of the worst performers for the Australasian portfolio over the month was Auckland Airport (-8%), after MBIE announced it had initiated a review on how airports are regulated in NZ. This raises a risk that the Airport’s retail and carparking businesses could be combined with the regulated aeronautical activities when the airport's allowable returns are being reviewed, which would reduce the profits the airport generates from these activities.

Other detractors for the month were Mainfreight (-10%) and Ryman (-20%) for more of the same reasons as last month; tariff uncertainty for Mainfreight, the global logistics company, and continued negative sentiment from investors following their dilutive $1bn equity capital raise for Ryman.

Amid broader market turbulence, there were a few companies that posted modest positive returns for the month. Infratil rose +1.6% for the month, buoyed by the revaluation of Australian-based data centre company, CDC. This, coupled with insider share purchases and renewed investor sentiment towards data centres bolstered the stock. Defensive names such as Vector (+1.5%) and REITS (HomeCo +3.8%) also provided some support for the portfolio.

Returns to the 30th of April 2025 

(after fees* and before tax) 

Generate KiwiSaver Funds:

Generate Managed Funds:

** 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 30th of April 2025

Generate total Funds Under Management (FUM) as of 30th of April 2025: $6,676,619,547

International Equities 

Global equities continued their recovery path in May as the headlines on tariffs turned incrementally positive, and corporate earnings showed resilience in the face of geopolitical uncertainty. US equities, which have significantly lagged European equities in 2025, enjoyed a better month in May as the S&P 500 rose +6.2% and outpaced the +5.7% gain in the global MSCI index. It is worth noting that at one point in April, the S&P had fallen -19% from its peak, but by the end of May, it had narrowed the loss to less than -4%.

Technology shares led the charge as investors rotated back into blue chip names like Tesla, Amazon and Meta Platforms, all of which posted double-digit gains for the month. Among tech stocks, the best-performing name in Generate’s global portfolios was AI giant, Nvidia, up +24% in May; a sharp recovery from its post Liberation Day sell-off. The company rewarded investors’ loyalty late in the month when it posted first-quarter earnings that beat expectations despite being effectively shut out of the Chinese market by the Trump administration. The China hole was more than filled by surging demand for AI chips from the rest of the world. Other semiconductor holdings also performed well, with LAM Research, Micron Technologies and Taiwan Semiconductor among our best performers.

At a single stock level, there was no bigger winner in May than elf Beauty, which jumped more than +80% during the month. elf’s shares had been under pressure leading into May, but a solid earnings report suggests that the worst might be behind it.

We continue to have a largely positive view on global equity markets as we believe any short-term weakness caused by headlines and fear is likely to be temporary, presenting opportunities to buy high-quality names at discounted prices.

New Zealand & Australian equities

Australasian markets experienced positive performance in May, with the S&P/NZX 50 index gaining +4.3%, slightly outperforming the S&P/ASX 200 index, which rose + 4.2%. Additionally, the S&P/ASX REIT index climbed +5% in local currency terms.

There were a number of strong performers in the portfolio. Mainfreight increased by +26.6% following a trading update and full-year result that addressed U.S. tariffs. Trading within the Air & Ocean division was consistent with previous years. However, May's sea freight bookings on the U.S./China trade route were reduced, impacting 10% of volumes. The Australian business performed strongly, with net profit before tax increasing by +7%, while New Zealand's net profit before tax decreased by -10%. Despite Mainfreight's cautious outlook amid global uncertainties, the market was reassured by the results being less adverse than anticipated.

Manawa Energy reported weak financial results due to unfavourable weather conditions in New Zealand significantly affecting hydro generation output and in turn, profits compared to the previous year. However, this was overlooked by the market as the Commerce Commission granted clearance for Contact Energy's acquisition of the company. Consequently, Manawa's share price increased by +32%.

My Food Bag demonstrated resilience by stabilising its business amidst challenging economic conditions. The company reported revenues of NZ$162 million, with growth turning positive in the second half of the financial year for the first time since FY22. Its share price advanced by +23%, and the fund exited its small position.

Ryman Healthcare and Oceania Healthcare were key detractors, declining by -5% and -3%, respectively. Both businesses are in the preliminary stages of turnaround strategies, with current management initiatives yet to deliver substantial results.

Returns to the 31st of May 2025 

(after fees* and before tax) 

Generate KiwiSaver Funds:

Generate Managed Funds:

** 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.

^^^ these funds were established on 30 April 2025.

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 May 2025

Generate total Funds Under Management (FUM) as of 30th of May 2025: $7,062,998,015