Generate Fund Performance - February 2026

International Equities 

Global equities were mixed in February as investors began to scrutinise the cost of the AI boom, not just the promise. Even with strong earnings from major US tech firms, markets were unsettled by the scale of forward capex commitments – fuelling a rotation away from parts of the “Magnificent 7” and toward more cyclical, “old economy” areas that tend to benefit when growth looks durable. That broadening was reinforced by generally resilient US activity data (manufacturing back in expansion and services still growing), while easing inflation prints kept hopes alive that the Fed could pivot toward rate cuts later in the year.

In the United States, the S&P 500 fell 0.9% over the month, while the technology-heavy Nasdaq dropped 3.4%. The Dow Jones outperformed, rising 0.2%, and small-cap stocks were firmer, with the Russell 2000 gaining 0.7%. European equities performed strongly, with the Euro STOXX 50 lifting 3.2%, while the FTSE100 in the UK surged 6.7% to a fresh record high. In Asia, market performances were very dispersed, with the Hang Seng falling 2.8%, while the Nikkei soared 10.4% to a new all-time high.

Within Generate’s global portfolios, gold producers were standout performers as prices for the precious metal pushed higher amid escalating geopolitical tensions, and on concerns around nuclear talks between the US and Iran which ultimately broke down, precipitating US and Israeli strikes at the end of the month. Canadian-based producers Alamos Gold and Agnico Eagle Mines were particularly strong, rallying more than 45% and 30% respectively. Shares in Newmont Mining, the world’s largest gold producer, surged over 15%.

InPost was a strong contributor. The parcel locker operator soared after agreeing to a €7.8 billion takeover offer by a consortium led by FedEx and private equity firm Advent, at €15.60 per share. Following a near 45% gain year-to-date, we took the opportunity to realise profits and have now exited the position. The investment reflected our disciplined, bottom-up valuation approach, having added to the holding during periods of weakness last year.

Netflix rebounded strongly, rising around 15% over the month, with gains accelerating late in the period. The company ultimately declined to raise its offer for Warner Bros. Discovery’s studio and streaming assets after Paramount Skydance submitted a superior all-cash bid for the entire company. Paramount also agreed to cover a US$2.8 billion break fee payable to Netflix. While Netflix walked away from the transaction on valuation grounds, the market responded positively to management’s discipline, with investors reassured that the company would not pursue a “must-have at any price” acquisition.

Siemens Energy’s shares also rose approximately 15% over the month, reflecting both operational recovery and strong structural tailwinds. After a difficult period driven by quality issues in its wind division, recent results have shown improving margins, stronger order intake and easing balance sheet concerns, while the wind business itself is beginning to stabilise. Importantly, Siemens Energy is one of only two global manufacturers of large-unit gas turbines - widely viewed as one of the most practical off-grid power solutions for energy-intensive data centres. More broadly, policymakers and utilities are increasingly recognising the role of gas-fired generation as reliable, on-demand capacity that complements intermittent renewables. Alongside this, Siemens Energy produces critical grid and electrification equipment that is currently in short supply. As order backlogs and earnings visibility have strengthened, the market has re-rated the shares from previously depressed levels.

On the downside, Amazon and Microsoft were weaker, falling approximately 12% and 9% respectively, as investors grappled with the scale of ongoing AI-related capital expenditure. Amazon delivered strong quarterly results, with revenues rising 14% to US$213 billion, but flagged plans to invest around US$200 billion in 2026, up sharply from US$130 billion last year. Similarly, Microsoft reported robust demand for AI services and expanding adoption of Copilot across its ecosystem, yet quarterly capital expenditure of US$37.5 billion exceeded expectations as the company accelerates its AI infrastructure build-out.

We continue to view both Amazon and Microsoft as exceptionally high-quality businesses with durable competitive advantages. Their scale, platform integration and long-term monetisation opportunities in AI underpin our confidence that these investments, while substantial, will prove strategically sound over time.

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New Zealand & Australian equities

The New Zealand and Australian equity markets both delivered strong performances during the month. In New Zealand, the NZX50 Gross Index rallied 2.2% amid further signs of improving economic momentum, and the RBNZ meeting which delivered a more dovish Monetary Policy Statement than many expected. Manufacturing remained in expansion, dairy prices continued to strengthen, and tourism continued its post Covid recovery. The unemployment rate rose to a decade high of 5.4%, but this largely reflected higher participation, suggesting confidence is gradually returning to the labour market. While green shoots are emerging, the economic recovery remains uneven, with housing and retail activity still soft, and several earnings results during the month reflected that domestic patchiness. The “early days of a recovery” narrative was reinforced by the RBNZ which left the OCR unchanged during the month, and tempered expectations for near term rate hikes.

Australian equities were notably stronger, with the ASX200 surging 3.7% during the month to close at a record high, supported by one of the strongest February reporting seasons in several years. Earnings beats outnumbered misses by roughly two-to-one, while guidance upgrades comfortably exceeded downgrades, driving a meaningful uplift in FY26 earnings expectations. Gains were led by the banks and miners, with consumer and industrial names also contributing. The Reserve Bank of Australia raised the cash rate by 0.25% following a re-acceleration in inflation, but against the backdrop of a resilient economy. The arrival of a rate hike and the prospect of further tightening weighed on property stocks – the A-REITS index fell 3.5% during the month.

a2 Milk rebounded strongly during the month, rising 17% after delivering a well-received first-half result. Revenue increased 18.8% to $993.5 million, with infant formula sales up 13.6% and record market share achieved in the Chinese-label segment. Encouragingly, the company continues to gain share in China supported by premium product positioning and expanding distribution partnerships. Management upgraded full-year guidance and indicated it is on track to achieve its $2 billion medium-term revenue target ahead of schedule. The result also benefited from a lower New Zealand dollar, which provided an FX translation tailwind. Overall, the performance reinforced confidence that market share gains and product innovation can help offset broader demographic headwinds in its key market of China.

Across the Tasman, Commonwealth Bank of Australia (CBA) was a standout performer, rising 21.5% over the month. The bank delivered a first-half FY26 result that exceeded market expectations, with cash profit rising 6% to A$5.4 billion. Net interest margins were more resilient than feared despite intense lending competition, while loan growth remained strong, with CBA writing a record volume of mortgages and maintaining its leading market share. Return on equity improved to 13.8%, underscoring the strength of the franchise. Asset quality remained sound and capital levels robust, allowing the bank to increase its fully franked interim dividend. The result reinforced CBA’s position as the highest-quality domestic banking franchise, and the share price reaction reflected renewed investor confidence following a period of softer performance last year.

Woolworths also delivered a very strong performance, with shares rising 19.3% following a better-than-expected first-half FY26 result. The supermarket operator has endured a prolonged period of underperformance relative to Coles, but this result provided the first clear evidence that trading momentum is turning. Sales in the core Australian supermarket division accelerated through the half, with growth strengthening into the third quarter, supported by targeted promotions and price reinvestment that lifted customer frequency and basket size. Encouragingly, market share appears to be stabilising. Margin performance also benefited from ongoing cost-out initiatives, helping to rebuild investor confidence that operational execution is improving. While competition remains intense and consumer spending remains value-focused, the result suggests Woolworths is beginning to regain its footing.

On the downside, Pro Medicus declined 27.4% over the month. The company’s first-half FY26 result was modestly below analyst expectations; however, the bulk of the share price weakness appears to have been driven by a broader AI-related sell-off across global software stocks rather than any material deterioration in fundamentals. Pro Medicus remains a high-quality business with a strong track record of winning and retaining major US hospital contracts, supported by its proprietary, cloud-based imaging platform. It is worth noting that this remains a very small position in the Australasian portfolio (just under 0.3%), and we have been selectively adding to the holding during the recent price weakness, reflecting our continued confidence in the company’s long-term growth outlook.

Returns to the 28th February 2026 

(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 28th February 2026

Generate total Funds Under Management (FUM) as of 28th of February 2026:
⁠$8, 795,462,284