International Equities 

After a strong start to the month, global equity markets delivered contrasting performances over the course of June. While there was cause for optimism on the geopolitical front, which saw oil prices fall around 25% from their peak levels earlier in the month, there were questions over the durability of the US/Iran ceasefire. This in turn continued to cast uncertainty over the outlook for inflation and interest rates. Hawkish comments from some central bankers at meetings during the month further prompted investor caution. After leading the way higher in previous months, the technology sector retreated, while older economy names were more in demand.

The MSCI World Index eased 0.83% in US dollar terms during the month. In the US the S&P500 and Nasdaq both made record highs at the start of the month, before closing out June down 1.1% and 2.8% respectively as the technology sector eased. A rotation towards older economy stocks saw the Dow Jones gain 2.5% over the month, closing June at record highs. European markets delivered strong gains with the STOXX50 up 4.6% while in Asia, Japan was a standout, with the Nikkei jumping 5.6%, reaching new all-time highs, before giving up some gains towards the end of the month.

The strongest performers in our international portfolios were an eclectic mix of semiconductor, healthcare, and cyclical companies. This reflected both the persistence of certain AI-driven investment trends, and improving sentiment across parts of the broader economy.

Semiconductor and AI infrastructure-related companies remained key contributors despite broader volatility in the sector during the month. Micron Technology delivered another strong performance, rising 18.9% during the month. The company delivered a very strong earnings result, with the memory-chip maker reporting a more than quadrupling in revenue from a year earlier to US$41 billion. Management pointed to extraordinary demand for AI infrastructure and little sign of supply catching up anytime soon.

Lam Research (+36.2%) and ASML (+23.4%) delivered even strong performances. Investors continued to recognise their central roles in the semiconductor manufacturing ecosystem and continued robust expenditure by chipmakers seeking to meet accelerating AI-related demand.

Marvell Technology (+35.5%) was also a very strong contributor, benefiting from its exposure to custom silicon and high-speed networking solutions used in cloud and AI infrastructure. Demand from hyperscale customers remains robust, with increasing adoption of AI-optimised architectures supporting strong growth expectations.

Outside the technology sector, UnitedHealth Group (+9.3%) performed well during the month, with investor sentiment supported by the company's defensive earnings profile and continued strength in its core health insurance and services businesses. In a market still navigating macroeconomic uncertainty, UnitedHealth's consistent earnings delivery and scale continue to underpin its appeal.

Alaska Air Group (+13.4%) was a positive contributor, with the shares benefiting from improving sentiment toward the airline sector. Lower fuel costs and signs of steady travel demand have supported the outlook for margins, while signs of easing geopolitical tensions have helped reduce concerns around demand disruption.

On the downside, Microsoft (-17.2%) and Amazon (-11.9%) detracted from performance during the month. Investor focus remains around the scope for AI to significantly disrupt their business models. In addition, the scale of capital investment required to support their expanding AI infrastructure has prompted increased scrutiny from the market, particularly regarding the timing and ultimate returns on this investment. Despite this, the underlying fundamentals for both companies remain strong, with continued growth in cloud services and expanding AI capabilities expected to support earnings over the long term.

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New Zealand & Australian equities

The NZX50G gained 2.9% during June. Investor sentiment improved as expectations for further interest rate increases eased somewhat following the ceasefire in the Middle East and the accompanying decline in oil prices. Lower energy prices have reduced inflation concerns, improving the outlook for household spending and supporting expectations that New Zealand's economic recovery can resume.

Australian equities also delivered a positive month, with the S&P/ASX200 rising 0.5%. The Reserve Bank of Australia left interest rates unchanged during June as policymakers continued to balance persistent inflation pressures against moderating economic growth.

Amongst the strongest contributors, a2 Milk surged 39.7% during the month, driven by a series of favourable announcements that restored market confidence. The company received approval from China's State Administration for Market Regulation (SAMR) to transition its existing infant formula registrations to a2-branded products, removing a key regulatory overhang and validating its investment in production capacity at Pōkeno. Following the approval, the Board declared a fully franked NZ$300 million special dividend, signalling both balance sheet strength and confidence in the company's outlook.

Pro Medicus was also a standout performer, soaring 53.8% during the month following a series of contract wins and renewals that reinforced the strength of its Visage imaging platform. The company secured a A$28 million, five-year renewal with Allegheny Health Network, alongside a A$16 million, seven-year contract with TidalHealth. In addition, a A$16 million, five-year renewal with Ohio State University's Wexner Medical Center expanded the scope of services to include workflow and cardiology imaging, increasing recurring revenue visibility. The company also announced a reseller agreement with Echo IQ, further enhancing its AI-enabled cardiovascular imaging capabilities and broadening its product ecosystem.

Brambles also delivered a strong return, gaining 17.6% during the month. While there were no major company-specific announcements, the shares continued to benefit from the company's on-market share buyback programme.

On the downside, Mainfreight declined 4.3% during the month despite the absence of any material company-specific news. We remain positive on the company's long-term outlook, supported by its high-quality management team, strong balance sheet and proven ability to navigate economic cycles. Notably, the share price has improved since month end amid renewed optimism around ceasefire negotiations, which has helped buoyed market sentiment toward cyclical stocks.

Returns to the 30th June 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 June 2026

Generate total Funds Under Management (FUM) as of 30th of June 2026:
⁠$10,017,501,273

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