International Equities 

A theme that dominated earnings season in July was a notable shift in investor focus towards the commercial returns being generated from artificial intelligence investment. Companies able to demonstrate that AI investment was translating into stronger earnings, higher growth and increasing customer demand were rewarded. Those spending heavily without clear evidence of returns were treated far more cautiously.

The clearest winners were Microsoft and Amazon, which were both strong contributors to performance after surging following their earnings releases.

Microsoft soared 25% during the month after delivering one of the strongest earnings reports of the season. Quarterly revenue jumped 18% to US$90 billion, while Azure cloud revenue exceeded US$100 billion annually for the first time. Azure growth accelerated to 43%, and Microsoft 365 Copilot surpassed 30 million paid seats, highlighting accelerating adoption of the company's AI offerings. The market's reaction was extraordinary. In a single trading session, Microsoft added almost US$500 billion in market value, the largest one-day increase ever recorded by a listed company.

Amazon reinforced the same message. Amazon Web Services (AWS) grew revenue 37% year-on-year to more than US$42 billion, its fastest growth rate since 2021 and well ahead of expectations. Management increased its capital expenditure forecast to US$220 billion for the year, yet investors responded positively because they could clearly see the payoff from that investment. AWS remains Amazon's most important profit engine, and management indicated cloud demand continues to exceed available capacity, with current investment levels potentially insufficient to meet expected demand in 2027. Amazon shares recorded their strongest one-day gain since 2012 following the result and ended the month 14% higher.

Mastercard was also among the strongest contributors, rallying around 12% following a robust quarterly result. Quarterly revenue jumped 14% to US$9.3 billion while net income increased 19% to US$4.39 billion, comfortably exceeding expectations. Transaction volumes remained resilient despite ongoing geopolitical and economic uncertainty, with gross dollar volume increasing 8% to US$2.9 trillion and cross-border transaction volumes rising 12%. The result reinforced the strength of consumer spending, particularly among higher-income households, while continued growth in Mastercard's higher-margin cybersecurity, fraud prevention and data analytics businesses supported strong profitability.

On the downside, semiconductor supplier SK Hynix fell 35% during the month despite reporting another exceptional result. Operating profit increased more than five-fold and the company announced plans to invest at least US$31 billion this year to expand production of advanced AI memory chips. The shares were caught up in a broader sell-off across Korean technology stocks, exacerbated by margin calls and concerns around AI-related investment. Despite the decline, the shares remain up around 150% year to date and have risen more than six-fold over the past year. At approximately four times earnings, we continue to view the valuation as compelling, particularly given the company's dominant position in AI memory chips and strong long-term demand outlook.

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New Zealand & Australian equities

Mainfreight was among the strongest contributors to performance, rising 13% during the month. The logistics company provided a highly encouraging trading update at its annual shareholder meeting, reporting that trading conditions had continued to improve since its May result. Management noted stronger-than-expected revenue and profit momentum across much of the network, suggesting the recovery experienced during the second half of FY26 had accelerated into the new financial year. The update was particularly encouraging given market expectations had already improved in recent months. New Zealand operations reported a strong start to the year across both transport and warehousing, while management also highlighted disciplined cost control and a lower capital expenditure outlook.

Dexus gained 11% during the month, supported by continued progress on its asset divestment programme and improving sentiment towards the property sector. The company announced the sale of three office assets at prices close to book value, taking total divestments beyond its $2 billion target for FY25-FY27. Achieving sales at book value was particularly encouraging given Dexus' share price continues to imply a discount of around 30% to the value of its underlying assets. Proceeds are being directed towards debt reduction and strengthening the balance sheet. The sector also benefited from growing expectations that interest rates may move lower over the coming year.

On the downside, Pro Medicus declined 20% during July despite the absence of any material company-specific news. The weakness largely reflected broader investor concerns around elevated valuations across high-quality growth companies, with several Australian technology favourites also experiencing sharp declines during the month. While a broker downgrade may have added to the selling pressure, the move appeared to be driven primarily by valuation concerns rather than any deterioration in the company's underlying business which remains strong from our perspective.

Returns to the 31st July 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.

^ 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 July 2026

Generate total Funds Under Management (FUM) as of 31st of July 2026:
⁠$10,066,969,573

International Equities 

Fujikura was the strongest contributor, rising 31.9% after delivering an exceptional first-quarter result and materially upgrading its full-year outlook. Revenue increased 50% to ¥402 billion, while operating profit rose 155% to ¥104.8 billion and the operating margin expanded from 15.3% to 26.1%. Growth was concentrated in Fujikura’s information and communications business, where revenue increased 84% and operating profit nearly tripled to ¥98 billion as demand strengthened for optical components, fibre cables and engineering services used in artificial intelligence data centres. The company also reported improved visibility on several large optical-component orders, including a new data-centre project outside the United States. This prompted management to lift full-year revenue guidance from ¥1.46 trillion to ¥1.76 trillion and operating profit guidance by 39% to ¥432 billion. The result provided further evidence that artificial intelligence investment is extending beyond semiconductors into the high-speed connectivity required inside data centres. Fujikura is supporting this growth with a previously announced investment of up to ¥300 billion to increase optical-fibre and cable capacity to as much as three times current levels across Japan and the United States.

Netflix gained 13.0%, supported by renewed confidence in the company’s advertising opportunity. The most important development during August was Netflix’s announcement that commitments secured through its 2026 United States advertising upfront had nearly doubled from the previous year. Demand was broad across entertainment and live programming, with game sponsorships for the 2027 FIFA Women’s World Cup already sold out and most available in-game advertising inventory committed. The news built on a solid operating backdrop: second-quarter revenue increased 13.4% to US$12.56 billion, driven by membership growth, pricing and higher advertising revenue, while members watched more than 97 billion hours of content during the first half of 2026. Netflix continues to expect advertising revenue to roughly double to around US$3 billion this year. With subscription growth becoming more mature, the August announcement strengthened the case that advertising, pricing and live programming can become increasingly important sources of growth.

Nvidia rose 10.0%, with almost all of the month’s gain occurring after another exceptionally strong earnings result late in August. Quarterly revenue more than doubled to US$96.2 billion, ahead of expectations, while data-centre revenue increased 117% to US$89.0 billion. Nvidia forecast approximately US$108 billion of revenue for the current quarter, also above market expectations and without assuming any data-centre computing revenue from China. Management went further than usual by forecasting revenue growth of around 70% in the following financial year, compared with the 40% growth expected by the market before the result. The strong guidance reassured investors that spending on artificial intelligence infrastructure remains strong and is broadening across cloud providers, specialist artificial intelligence companies and enterprise customers. Supply constraints, rising memory costs and competition from customers’ internally developed chips remain risks, but the August result provided unusually strong evidence that demand has not yet slowed.

Applied Materials declined 9.7% despite reporting record results and guidance above expectations. Quarterly revenues at the semiconductor equipment maker rose 25% to US$9.12 billion and adjusted earnings increased 41%, but investors focused on unchanged margin guidance and whether the company was growing quickly enough relative to competitors. The stock had more than doubled earlier in the year, setting a high bar, while concerns around China and local equipment suppliers also weighed on sentiment. Nevertheless, management raised its semiconductor-systems outlook, supported by strong demand for advanced memory, leading-edge logic and advanced packaging as AI increases the complexity of chip manufacturing.

Royal Caribbean declined 15.6% as higher fuel prices, geopolitical disruption and balance-sheet concerns weighed on sentiment towards the cruise line operator. While its late-July result exceeded expectations and guidance was raised, modest booking disruption on selected itineraries and rising oil prices contributed to a broader cruise-sector sell-off. Despite these pressures, demand remains resilient, with record pricing, booking volumes ahead of last year and strong early demand for 2027.

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New Zealand & Australian equities

CSL performed strongly during the month, rising 39%. The healthcare company delivered an FY26 result that was broadly in line with its previously reduced expectations but, more importantly, provided encouraging signs that conditions were improving across its core plasma business. Stronger-than-expected immunoglobulin and albumin sales increased confidence that the worst of the earnings disappointments that weighed on sentiment earlier in the year may now be behind the company. Investors were also encouraged by FY27 profit guidance, which came in slightly ahead of market expectations and shifted attention back towards the prospect of renewed earnings growth. A further positive was greater clarity emerging during the month that proposed US pharmaceutical tariffs would not adversely affect the company. With expectations having been reset to a low level, evidence that earnings were stabilising and that the outlook remained credible was sufficient to drive a substantial recovery in the share price.

Spark outperformed during the month, gaining 11% during the month. The full year results showed revenue and gross profit modestly ahead of forecasts, providing encouraging signs of stabilisation after a challenging period for the business. Mobile remained a relative bright spot, with trading momentum holding up reasonably well and recent price increases supporting a clearer pathway towards revenue growth. Management continued to simplify the business and focus investment on its core connectivity operations. Importantly, FY27 earnings and dividend guidance were slightly ahead of market expectations. With investor concerns having shifted from the pace of earnings decline to whether the company was approaching an earnings floor, the combination of an in-line result and credible signs of stabilisation was enough to trigger a meaningful re-rating.

ResMed rose 11% during the month following another solid result that reinforced the resilience of demand for its sleep-apnoea products, providing reassurance on the potential long-term market impact of GLP-1 weight-loss drugs. While inflation continues to create cost pressures, ResMed's pricing power has enabled it to increase prices and offset much of the impact. Pricing also helped absorb costs associated with the Astral ventilator recall, limiting the effect on underlying earnings. Strong cash generation remains a key feature of the business, and management announced a US$450 million accelerated share buyback, providing an additional tailwind to future earnings growth and shareholder returns.

On the downside, Charter Hall declined 17% despite delivering a solid FY26 result. Operating earnings rose 27% to A$488 million, while the FY27 outlook remained broadly intact. The weakness reflected a broader sell-off in Australian property stocks as rising bond yields weighed on valuations and increased funding cost concerns. Despite the near-term pressure, we continue to view Charter Hall favourably given the quality of its funds management platform, strong operating leverage, and long-term earnings growth potential.

HomeCo Daily Needs REIT declined 13% during the month. While the underlying property portfolio continued to perform reasonably well, with FY26 funds from operations meeting expectations and rental income growth remaining solid, higher borrowing costs absorbed much of that benefit and limited earnings growth for shareholders. Investor concerns were amplified by FY27 guidance that fell short of expectations and a shorter hedge profile, increasing sensitivity to higher interest rates. Despite these challenges, the trust continues to trade at a substantial discount to asset value and offers an attractive distribution yield.

Returns to the 31st August 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.

^ 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 August 2026

Generate total Funds Under Management (FUM) as of 31st of August 2026:
⁠$10,362,328,506

International Equities 

Global equity markets were mixed during September. The MSCI World and S&P 500 both finished the month slightly lower, while the technology-heavy Nasdaq 100 rallied 3.2%, reflecting investors' continued preference for companies benefiting from artificial intelligence and digital infrastructure trends. Performance across the market remained relatively narrow, with AI-related businesses accounting for much of the positive momentum.

Meta Platforms was the standout performer within the portfolio, gaining approximately 26% during the month. Investor enthusiasm followed a series of significant AI-focused product announcements, including a new generation of smart glasses, a substantially lighter virtual reality headset, and expanded capabilities for its AI assistant, Muse. Importantly, the announcements reinforced the view that Meta's investments in artificial intelligence are evolving beyond standalone products into a broader ecosystem designed to integrate AI into everyday consumer experiences. The market responded positively to the increasing commercialisation of these initiatives and Meta's growing leadership position in consumer AI.

Several of the portfolio's AI infrastructure holdings also delivered strong returns. Applied Materials (+11%) generated a double-digit gain during the month. The company is one of the world's leading suppliers of semiconductor manufacturing equipment and continues to benefit from increasing capital expenditure across the global semiconductor industry. Investor confidence was supported by the growing requirement for advanced chip manufacturing capacity to meet accelerating AI-related demand.

Lumentum (+6%) performed strongly as investors continued to anticipate rising demand for advanced optical networking equipment required to support the rapid expansion of AI data centres. As hyperscale technology companies accelerate investment in AI infrastructure, demand for the high-speed connectivity solutions provided by Lumentum remains a key beneficiary.

Micron Technology (+11%), one of the world's largest manufacturers of memory and storage semiconductors, was another notable contributor. The shares continued their strong year-to-date performance before the company delivered an impressive earnings result late in the month. Data centre revenue increased more than tenfold from the prior year, highlighting the extraordinary demand for high-bandwidth memory products used in AI servers and advanced computing applications. The result reinforced Micron's position as a critical supplier within the AI ecosystem and further strengthened confidence in the long-term outlook for memory markets.

On the downside, consumer and business information provider Experian (-19%) underperformed during the month despite limited company-specific news flow. The shares declined as investors rotated capital away from more defensive growth businesses and towards higher-beta technology and AI-related beneficiaries. While market sentiment weighed on near-term performance, Experian continues to benefit from its leading position in consumer and commercial data analytics, with underlying business fundamentals remaining sound.

Blackstone (-22%) was also sharply weaker during the month. Alternative asset managers generally experienced softer performance as investors became increasingly selective across financial stocks following a period of strong gains earlier in the year. Despite the share price weakness, Blackstone remains well positioned to benefit from the continued expansion of private markets and growing institutional demand for alternative investment solutions

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New Zealand & Australian equities

September was a weaker month for Australasian equities, with the NZX50 declining 2.5% and the ASX100 Industrials falling 1.1%. Higher bond yields and renewed inflation concerns weighed on investor sentiment. Rising oil prices added to inflation pressures, pushing expectations towards tighter monetary policy and putting pressure on interest-rate-sensitive shares. Despite the softer market backdrop, several portfolio holdings delivered strong positive returns, supported by company-specific developments and improving investor confidence.

CSL was the strongest contributor during the month, advancing 8.8%. Shares in the healthcare name continued to recover from the post-result weakness experienced earlier in the year as investor confidence gradually rebuilt. News flow from Seqirus was incrementally positive, with CSL announcing the successful completion of its 2026/27 influenza manufacturing campaign and an expansion of vaccine availability in the United States. Investor sentiment was further supported by broker commentary highlighting potential upside from competitor supply disruptions, while encouraging Phase 3 influenza vaccine efficacy data reinforced the long-term strength of the franchise. Much of the share price appreciation reflected a recovery from previously depressed expectations rather than a material upgrade to earnings forecasts.

Mercury NZ gained 6.3% during the month. Sentiment towards New Zealand electricity generators remained constructive following a relatively supportive FY26 reporting season. The broader electricity market backdrop also remained favourable, with ongoing discussion around security of supply, rising electricity demand, and the need for significant new generation investment. These factors continue to support established renewable generators such as Mercury, which are well positioned to benefit from future industry investment and demand growth.

Vulcan Steel rose 5.9% over the month. There was limited company-specific news flow, with the share price appearing to benefit from a rebound following weakness in the prior month. The position in the steel processor and distributor was established during August, and it was encouraging to see positive early performance as the investment thesis develops. We continue to view Vulcan as an attractive business with exposure beyond traditional residential construction, including roofing and other segments where demand is driven more by repair and replacement activity than new housing construction.

On the downside, online automotive marketplace business CAR Group declined 17.4%. There was little company-specific news, with the shares caught up in a broader sell-off across software and technology-related businesses. Market concerns intensified following the launch of Meta's new Muse application, which heightened investor debate around the potential disruptive impact of artificial intelligence on software business models. The resulting sector-wide weakness weighed heavily on valuation multiples despite no material change to CAR's underlying operating performance.

SEEK fell 16.0% during the month. In addition to the broader software sector sell-off, investors also focused on the job advertising platform’s domestic economic exposure. Concerns that Australian economic growth is moderating led to fears of a softer employment market, potentially reducing hiring activity and job advertisement volumes across SEEK's platform. While these concerns impacted sentiment during the month, the business remains the dominant employment marketplace across its key markets.

Returns to the 30th September 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.

^ 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 30th September 2026

Generate total Funds Under Management (FUM) as of 30th of September 2026:
⁠$ 10,677,110,653.91