Unit Prices as at 31 January 2019 ($) Focused Growth 1.6651Growth 1.6029 Conservative 1.3519 |
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Funds under Management as at 31 January 2019: $1.081 billion |
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In other news More change ahead this year for KiwiSaver |
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Your online account Remember you can see your balance, transactions, holdings 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” and follow the simple instructions. |
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Contact Us If 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.We thank you for your support. The Generate Team |
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Disclaimer The 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. |
Welcome to the February edition of the Generate KiwiSaver Scheme Newsletter.
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Performance of Our FundsReturns to 31 January 2019 (after fees* and before tax).
**the funds opened on 16 April 2013 Note: Past performance is not necessarily an indicator of future performance. |
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After a tough last quarter, share markets around the world started the year off on a more positive note: strong returns with minimal volatility. The key change was a more accommodative stance assumed by the Federal Reserve. The chances of a thawing in trade tensions also rose with both the United States and China making a number of encouraging statements about progress and the importance of reaching a deal. Interestingly, the growing possibility of a disorderly Brexit from the EU in late March was not enough to derail sentiment.
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Recap of market movements in JanuaryGlobal share markets managed a very positive start to 2019 with the MSCI World Index returning an impressive 7.1% (in local currencies).The Europeans were clearly unimpressed. Rhetoric was at best not encouraging, with the Europeans arguing that the deal was good, that it was designed by Britain and that they would not reopen negotiations with May. With little more than two months before Britain was scheduled to leave the EU any workable compromise looks to be a long way off. Forget about actually implementing it. All this while the drums beat louder for a second referendum… Over the ditch, Australia also lagged other markets. Arguably, this was to be expected because the “lucky country” avoided the pullback suffered by most share markets in December. The ASX 200 Accumulation Index increased by 3.9%. The move higher was very broad with the financial sector the only sector not to contribute positively. No doubt speculation on the upcoming final Royal Commission Review report weighed on the sector. A strong oil price ignited energy stocks which were up 11.5%. |
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Warren Buffett wisdomsAfter 50 years at the helm of Berkshire Hathaway (which is currently one of the largest growth investments for all three of our funds), Warren Buffett has become widely regarded as one of the world’s greatest investors. 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: |
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Investing 101Be prepared to walk away |
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Top Holdings as of 31 January 2019Please log in to your account to see your full portfolio breakdown.
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Stock SpotlightSummerset Group HoldingsSummerset has undeniably been the turnaround success story of the aged care sector. The turnaround started when Quadrant took control of Summerset in 2009/10 and worked with management to put in place a plan that would see Summerset’s development rate step up significantly. In simple terms, the plan was to replicate the success of Ryman, but the failure of other companies to successfully execute similar strategies underlines the difficulty of the task. Success is a testament to the quality of the management team at Summerset. To understand how Summerset achieved this turnaround it is useful to review its business model. Like the other NZ retirement village developer/operators Summerset sells the right to occupy a unit to the resident. When they eventually vacate the unit Summerset pays them back this initial payment less a management fee. The payments made by residents to occupy their retirement units covers the total cost of developing the village, and as a result, the developer can then reuse this capital in the next development. The key to this business model is that it is capital light (capital is only tied up in villages under development and new units that have not been sold). This has allowed Summerset to almost triple the size of its portfolio over the last eight years (1,352 units at the end of 2010 to 3,732 units at the end of 2018). It also makes development very attractive because residents pay management fees and the retirement village owner also gets the benefit of rising property prices without having any capital tied up in the village. There is a risk that the slowing Auckland property market is a leading indicator for the rest of NZ, which would act as a headwind for the sector (and a number of other businesses exposed to the NZ economy for that matter!). It is worth remembering that this risk is transitory, but the ageing population thematic is structural. Precinct Property |
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Disclaimer © 2019 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. |
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