Generate Fund Performance - December 2025

International Equities 

Global equities had a softer month in December, as investors took some profits after a very strong 2025. The technology sector was more subdued, with market leadership shifting toward more cyclical names, despite mixed signals around the global economy. The US Federal Reserve cut rates again during the month, although the decision was a divided one. The European Central Bank kept rates on hold, while the Bank of England cut rates for the fourth time in 2025. In contrast, the Bank of Japan lifted its policy rate to 0.75%, the highest level in 30 years.

In the US, the tech-heavy Nasdaq ended December down 0.5%, while the S&P 500 finished the month broadly flat. The Dow Jones outperformed, gaining 0.7%, while the small-cap Russell 2000 eased 0.8%. In Europe, the Euro STOXX 50 jumped 2.3%, while in Asia the Hang Seng fell 0.9%, although the Nikkei edged 0.2% higher.

Within Generate’s global portfolios, Micron Technology was a stellar performer. The company reported a quarterly result that comfortably beat expectations for both revenue and earnings, driven by surging demand for memory and storage linked to AI data-centre expansion. Revenue rose 57% year on year to US$13.6 billion, while net income nearly tripled to US$5.2 billion. Guidance for the current quarter materially exceeded expectations, with revenue forecast at US$18.7 billion. Management highlighted strong growth in server demand and high-performance memory pricing, noting that AI infrastructure continues to drive tight supply conditions. The gains during the month capped off a very strong year for the company, with the share price more than tripling over the course of 2025.

Alaska Air was also a very strong contributor, rising 17% during the month. Travel demand continues to improve, while the airline’s network expansion has supported broker upgrades. The company recently placed its largest-ever aircraft order with Boeing (including 105 Boeing 737-10s and five 787 Dreamliners), signalling a clear commitment to long-term growth, fleet renewal and international expansion following its merger with Hawaiian Airlines. The scale of the order, particularly the addition of wide-body aircraft, reinforces management’s ambition to build a more competitive global network from Seattle. Alaska is aiming to become the fourth-largest US airline and deliver US$1 billion in incremental profit by 2027.

Newmont Mining also performed strongly, rising 10%. As the world’s largest gold miner, the company has benefited from a roughly 60% surge in gold prices over 2025. Demand for gold has been driven by growing concerns around sovereign debt levels and the sustainability of fiat currencies (particularly the US dollar, which is gold’s default denomination). Interest-rate cuts have reduced the opportunity cost of holding gold, while geopolitical instability and broader global uncertainty have reinforced its traditional role as a safe haven. Central banks have also continued to accumulate gold, while supply growth has remained constrained.

On the downside, shares in Broadcom fell 14%, giving back some of the strong gains made earlier in 2025. The chipmaker released a strong set of results, with earnings beating expectations (AI chip sales jumped 74% and revenue reached US$18 billion) but margins disappointed due to substantial upfront costs associated with building server racks and sourcing components for custom AI systems. Management also refrained from providing clear guidance for 2026, describing AI demand as “a moving target,” and the lack of visibility unsettled investors. That said, Broadcom’s order book remains robust, with a US$73 billion AI backlog, including major orders from Anthropic and OpenAI. Despite the pullback, the stock still finished the year up more than 40%.

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New Zealand & Australian equities

The New Zealand and Australian markets both rose during the month, albeit with different drivers at work. The NZX 50 rose 0.4%, with further green shoots emerging in the local economy. Data released during the month showed that gross domestic product expanded by a better-than-expected 1.1% in the third quarter, adding to optimism around the outlook. In Australia, the ASX 100 rose 1.2%, buoyed by the mining sector as copper and gold prices hit record highs.

The perceived divergence in the respective monetary policy backdrops meanwhile narrowed somewhat. The Reserve Bank of Australia left rates on hold but signalled that the door remains open to potential tightening in early 2026. Markets are pricing in a rate hike by May, despite a recent data release showing a slowdown in monthly inflation. In New Zealand, swap markets are suggesting that the RBNZ has reached the end of the current easing cycle, even as the central bank appears to be maintaining optionality to cut further should the economy require additional support.

In New Zealand, Fletcher Building was a standout performer, surging 10% during the month. Demand for the stock has been driven by investors seeking cyclical exposure to a New Zealand economic recovery. Company-specific news flow was limited; however, there was a well-received update confirming that the company had prepaid all outstanding US private placement notes, exiting that market as part of a broader effort to simplify its funding mix and lower its effective interest rate.

Oceania Healthcare was also a very strong performer for a third consecutive month, rising 8%. The company continues to benefit from investor appetite for businesses leveraged to an economic uplift. Oceania also noted that the proposed changes to the Retirement Villages Act would add clarity, and that it already operates broadly within the parameters proposed by the Government. Management highlighted that the company buys back villas, apartments and care suites within a 12-month period, pays interest to residents from the six-month mark, and does not charge fees or accrue deferred management fees from the time of vacant possession. This clarification reduced perceived regulatory risk and any prospect of a new cost shock.

On the downside, Infratil fell 5.1%. The share price weakness, despite strong operating and financial performance, may have reflected broader global concerns around AI demand and the potential implications for Infratil’s CDC data-centre business. As the company has noted, CDC continues to see strong, broad-based demand, supported by a diversified customer base, with AI representing only one part of the overall demand mix. CDC’s average lease term is long (~around 30 years), providing significant earnings visibility, and Australia remains an attractive market for hyper-scalers given its mature data-centre ecosystem, favourable lease rates and access to cost-effective power. More recently, Infratil confirmed that an independent valuation lifted the value of its 49.72% stake in CDC to A$6.954 billion, an increase of A$174 million over the quarter.

We also began building a small position in ASX-listed Pro Medicus on recent share price weakness. The company develops and sells medical imaging software and is best known for its Visage platform, which enables radiologists to rapidly view, analyse and diagnose medical images such as CT and MRI scans. Its software is primarily sold to large hospitals and imaging networks (particularly in the US) under long-term contracts that generate high-margin, recurring revenue.

Returns to the 31st of December 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 December 2025

Generate total Funds Under Management (FUM) as of 31st of December 2025: $8,651,337,900