Unit Prices as at 31 January 2017 ($)Conservative 1.2160Growth 1.3198 Focused Growth 1.3293 |
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Funds under Management as at 31 January 2017:$ 358.5 million |
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In other newsThe 7-year-old who wrote a letter to Google |
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Your online accountRemember you can see your balance, transactions and returns on your savings via your Generate KiwiSaver Scheme online account. To access it click on “Member Login” at the top of our home page. Should you need to reset your log-in details please click on “Forgot your password/username” and follow the simple instructions. |
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Contact UsIf you have any questions after reading your newsletter, give us a call on 0800 855 322 or email us at info@generatekiwisaver.co.nz and we would be more than happy to help. |
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DisclaimerThe Generate KiwiSaver Scheme Member Newsletter has been prepared by Generate Investment Management Limited. It is based on information believed to be accurate and reliable although no guarantee can be given that this is the case. Clients, directors or employees of Generate Investment Management Limited may have an interest or holding in companies and securities mentioned in the newsletter. No part of the newsletter is intended as financial advice. For more information about the Scheme please refer to the Generate KiwiSaver Scheme Product Disclosure Statement. |
MEMBER NEWSLETTER FEBRUARY 2017 |
Welcome to the February edition of the Generate KiwiSaver Scheme Newsletter. We hope you had a great holiday season!
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Performance of Our FundsReturns to 31 January 2017 (after fees* and before tax).
Note: Past performance is not necessarily an indicator of future performance. |
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Global equities off to a solid start in 2017
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The global Economic Surprise Index is at six year highs |
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Source: Deutche Bank
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Following is a recap of market movements in JanuaryThe local share market put in a strong performance in January with the NZ50G gaining 2.5%. Gains were broad based with investors seemingly deciding that the sell off during the previous 4 months had gone too far. Aged care companies performed particularly well (more on this in the Generate Funds’ Performance section).Companies in the industrials sector were the top performers amid improving growth and inflation forecasts. Meanwhile oil and gas companies were among the laggards. |
Our decision to increase our exposure to the U.S. after the election was a good one and the fact that the market has managed to head higher despite no further details to date on tax cuts nor infrastructure spending bodes well. Of note we decided to hedge our bond holdings in order to protect them from further interest rate rises. Obviously it means our bondholdings will not participate in any downward movement in interest rates but we consider the risks to be geared towards higher rates in the medium term. January was notable for the strong performance from the aged care sector. The share prices of Ryman Healthcare, Arvida Group and Summerset Group gained 7.4%, 6.4% and 5.8% respectively. Early in the month Summerset released its fourth quarter metrics. The company built over 400 retirement units over 2016 versus 300 in 2015. In addition new sales were up 24% on the previous year. This coupled with the release of an upbeat broker research report on the sector helped drive these substantial gains. The funds’ largest property and infrastructure investment – Infratil – also had a good month with its shares gaining 4.4%. The stock has been lacking a positive catalyst of late, which has seen the shares move lower over the preceding four months. However, with Infratil announcing that they had bought back one million of its own shares in January the shares started to head higher. Clearly Infratil believe its shares were sold off too heavily and many in the market (including ourselves) agree. The weakest performing property and infrastructure stock was Australian property company Stockland with a 5.0% fall. Due to higher interest rates and concerns they may head higher the whole Australian property sector was out of favour in January and Stockland was no exception. The top performing International Equities Manager (IEM) was Polar Capital Technology Trust Plc (PCT), with a 3.3% return in January (in GBP). Shares of several of PCT’s top holdings, including Facebook, Microsoft and (Google parent) Alphabet performed strongly during the month. The weakest IEM performance was from the Magellan Global Fund (MGF) with a 2.6% fall (in AUD). During the month the AUD rose 4.9% against the USD and given the majority of companies held in MGF are denominated in USD’s this fall is attributable to the currency movement. |
Warren Buffett wisdomsAfter 50 years at the helm of Berkshire Hathaway (which is typically one of our largest investments for both of our growth funds) Warren Buffett has become widely regarded as the world’s greatest investor. In his annual letters to shareholders, and in various interviews he has given, he has shared many of the lessons he has learned during his career. This month:“It is not that we don’t understand a technology business or it’s product. The reason we don’t invest is because we can’t understand the predictability of the economics ten years hence.”
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What's New in KiwiSaverIf you haven’t already tried the new Generate online member area we would encourage you to give it a go. We are getting very positive feedback from new members who log in and experience all the functionality - especially compared to what they were used to seeing on their internet banking apps. Our functionality allows you to see your balance, the breakdown of contributions and performance, your transactions history and to switch between our funds with the click of a button. Importantly we also provide a full breakdown of all your direct investments so you can see exactly what your KiwiSaver account is invested in, or more importantly for some - what it is not invested in! |
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Investing 101Short selling |
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Top Holdings as of 31 January 2017Please log in to your account to see your full portfolio breakdown.
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International Equities Manager SpotlightJupiter European Opportunities Trust PlcFounded in 1985 as a specialist boutique, Jupiter has become one of the UK’s most respected and successful fund management groups. Next month: Berkshire Hathaway Inc. |
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