Generate Fund Performance - June 2025

International Equities 

Global equities continued to recover from their recent sell-off as investors piled back into large cap technology and growth stocks. The MSCI World Index broke through to all-time highs during the month, led by an almost +5% gain in the US market.

The forces behind the rally were varied, among them – a reigniting of the AI trade, geopolitical relief (at least temporarily) in the Middle East, and cooling inflation data. Investors who stuck with their favourite stocks did well, as some of the biggest gainers in the month were companies that were harshly treated during the tariff-related sell-off of March/April.

Generate's global portfolios also performed well in June, comfortably outstripping gains in the wider market. Our top performers were predominantly technology stocks with strong exposure to the AI theme, such as Nvidia (+16.9%) and Taiwan Semi (+17.1%). Semiconductor equipment and memory chip companies were also swept up with the AI trade, boosting holdings such as LAM Research (+20.4%) and Micron Technology (+30.5%).

Laggards in June tended to be in the consumer sectors, with luxury goods stocks and airlines among the worst performers.

The US and Europe are gearing up for another earnings season in July. Management forecasts for the remainder of the year will be vital in assessing whether the recent rally can be sustained. We are quietly optimistic that the outlooks for our portfolio's holdings will prove to be robust.

New Zealand & Australian equities

The domestic market delivered another month of positive performance in June with the S&P/NZX 50 index gaining +1.5%. The NZ index was, however, surpassed by the general Australian and Australian real estate markets with the S&P/ASX 100 industrials index up +2.4%, and the S&P/ASX up +2.0% across the month in NZ dollars.

Spark (+9%) was the strongest performing stock for the domestic portfolio in June. There were numerous press articles speculating about the company's progress in selling down a portion of its data centre business. The sell-down boosts the company's value by freeing up capital to reduce debt and lowering future funding needs as the business scales up.

Vector (+5%) was the second largest contributor to performance in June. This is a company we have discussed several times in previous months. We like this business because it offers a good dividend yield and has received the regulator's approval to increase prices at robust rates over the next five years, which will enable it to continue growing its dividends.

The largest detractor during the month was Fletcher Building (-8%). Heading into the company's investor day in late June, the market expected the new management team to announce a strategy refresh that would sell the company, streamline operations, and exit from poorly performing, non-strategic businesses. Instead, management indicated they would give these businesses time to improve. They also provided volume metrics for the first time, which showed (at best) that NZ activity had bottomed and the declines in Australian activity were starting to slow down.

Returns to the 30th of June 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 June 2025: $7,394,247,033.05