Generate Fund Performance - May 2025

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