Generate Fund Performance - July 2023



Returns to the 31st of July 2023 

(after fees* and before tax) 

Generate KiwiSaver Funds:

1 Month 

1 Year 

5 Year (p.a.) 

10 Year (p.a.)

Since inception** 


Growth Fund 


















Balanced Fund




Conservative Fund




Defensive Fund




Generate Managed Funds:

 1 Month

1 Year

5 Year (p.a.) 

10 Year (p.a.)

Since inception** (p.a) 

Focused Growth Managed Fund^





Balanced Managed Fund





ConservativeManaged Fund





  • *Except the $3 per member per month administration expense that is charged to KiwiSaver members.  
  • ** The Generate KiwiSaver Scheme Focused Growth, Growth and Moderate funds opened on 16 April 2013. The Balanced, Conservative and Defensive Funds launched on 16 May 2022.
    The Generate Focused Growth Managed Fund opened on 1 November 2019. The Balanced and Conservative funds opened on 16 May 2022. 
    ^Following the launch of our new funds on 16 May 2022, the Conservative Fund was renamed as the Moderate Fund and the Focused Growth Trust was renamed as the Focused Growth Managed Fund. 
  • Past performance is not necessarily an indicator of future performance. Generate’s fund updates can be found here.

International equities update

Global equity markets continued to rise in July as favourable macroeconomic data, combined with healthy corporate earnings provided a fertile environment for equities. With seven months of the year now behind us, there is a lot of head-scratching going on given the strength of global equities in the face of higher interest rates, and what factors might derail the rally. While valuations appear fairly full, the risk of a sharp drawdown arguably lessened in July given the combination of cooling US inflation and robust economic data, a recipe that led several market pundits to scrap their negative outlooks for stocks in 2023. Even the US Federal Reserve contributed to the positive mood, stating that its economists are no longer forecasting a recession, merely a slowdown.

The variety of outperformers and the surge in cyclical stocks will also impress those who criticized the narrowness of the 2023 rally, which had been dominated by several large cap technology companies (dubbed “The Magnificent Seven” and consisting of Apple, Alphabet, Meta, Tesla, Nvidia, Amazon and Tesla). Energy was the best performing sector in July, and US regional banks were also significant outperformers as robust earnings allayed fears of further bank failures following the demise of First Republic and SVB Financial earlier in the year. Health care stocks took a back seat as investors chased riskier assets, although the fact that the sector also finished in the green speaks to the breadth of July’s rally.

The funds benefited from the rally in regional banks with a strong performance from Western Alliance. Other notable contributions came from medical technology company InMode, and US homebuilder Pulte Group. On the other side of the ledger, profit-taking in health care names (McKesson, Eli Lilly) and technology companies (ASML, Microsoft) detracted from performance.

New Zealand & Australian equities update

The New Zealand market continued to lag the US stock market in July, but still returned a positive 1.2% for the month as measured by the S&P/NZX50. We are now heading into a litmus test period for our local market with the reporting season kicking off in August. During this period approximately two-thirds of the benchmark constituents by market capitalisation will report their financial results. We will be closely monitoring company commentaries, with particular focus on trading outlooks given the current economic conditions.

Turning to the portfolio, we had some strong performances within the Real Estate Investment Trust (REIT) sector. This sector broadly benefitted from increasing market consensus that interest rates are at, or nearing, their peak. Peaking interest rates are a key first hurdle that is required for asset valuations to stabilise after a period of declines. Elevated interest rates have a cooling effect on REIT earnings via higher funding costs, and also on transaction activity. Standout contributors in our portfolio were Stride Property Group, +9.2%, HomeCo Daily Needs, +4.9%, and Investore Property, +4.4%.

Similar dynamics were at play in the retirement sector, with the two largest players enjoying increased optimism that the year-long decline in house prices has begun to slow and may even be nearing a bottom. Summerset was the lead performer returning +9.3%, followed by Ryman Healthcare +3.5%.

An interesting development occurred later in the month when Mainfreight provided a downbeat trading update at their annual shareholder meeting. Mainfreight was a large beneficiary of the Covid pandemic years as demand for transport logistics (especially Air and Ocean) skyrocketed, as did the prices that were paid for providing those services. So, while it was no secret that there would be an unwind of those elevated levels of profitability, the speed at which this unwind has occurred for Mainfreight surprised the market, which arguably had thought market share gains may offset the volume declines to a degree. Within Mainfreight’s announcement they highlighted significantly lower revenue and earnings linked to a swift reduction in Air & Ocean freight rates. Additionally, transport volumes and margins were lower across all geographies. Mainfreight have responded to a softer outlook by focussing on cost management across the business including a hiring freeze. A positive is that Mainfreight’s balance sheet remains strong, with a current net cash position. In summary, the share price declined by -4.2% for the month and has continued this decline in August to date.

Top Holdings as of the 31st of July 2023

International Equities 

Berkshire Hathaway


United Health Group


Meta Platforms

External Managers 

T Rowe Price Global Equity Fund

Worldwide Healthcare Trust

Te Ahumairangi Global Equity Fund

European Opportunities Trust

Magellan Global Fund Closed Class

Australasian Equities 



Contact Energy 

Fisher & Paykel Healthcare

Mercury NZ

Fixed Income

Kāinga Ora Bonds 

Local Government Funding Agency Bonds 

Contact Energy Bonds

Investore Property Bonds

Infratil Bonds

Generate total Funds Under Management (FUM) as at 31st of July 2023: $4,336,727,499