Performance chart
* S&P/NZX 2 Year Swap Index (1/11/2016 to now) New Zealand Government Stock Index (Inception to 31/10/2016)
Fund performance figures are after deductions for charges but before tax. Please note that past performance is not necessarily indicative of future returns. Returns can be positive or negative, and returns over different time periods may vary. No returns are promised or guaranteed.
Fund highlights
February 2025
The Income Fund had a solid February, rising +0.5% and outperforming the benchmark which was up +0.3%. Most of this outperformance came from offshore credit exposure where strong economic growth and careful bond selection contributed to returns.
Locally, all eyes were on the RBNZ which continued to reduce the official cash rate, meeting market expectations. Only six months ago, the official cash rate was 5.5%, 1.75% higher than today – a level that, in retrospect, was too high given the widespread difficulties the New Zealand economy is facing. Those with mortgages will be welcoming the interest rate relief.
Grifols (+5.8%) was easily the standout performer for the fund in February after it reported solid results. After a tricky few years navigating the post-COVID operating environment, 2025 looks to be the year Grifols hits its stride. Given Grifols’ lower credit rating (B), cash flow generation is one of the most important metrics for us to analyse. Grifols’ cash flow has begun to accelerate as revenue growth outpaces expenses, driven by increasing demand for their blood plasma products. Late in the month management also hosted their first capital markets day in years which providing a solid roadmap for growth, driving both its bonds and their stock price higher.
British Telecom (+1.5%) was added to the portfolio in February. The UK telecom operator is the incumbent provider of fixed and wireless broadband, with the latter provided via a nationwide fibre optic network (not unlike Chorus). This one-off project required a substantial amount of capital, straining BT’s balance sheet with too much debt. We think the buildout will taper significantly this year, helping to improve credit metrics as cash spend decreases. After adding the bonds in early February they have risen in value, suggesting the market agrees with our analysis.
Portfolio Team
Our Managed Funds
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Conservative Fund
Aims to provide stable returns over the long term by investing mainly in income assets with a modest allocation to growth assets.
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Growth Fund
Aims to grow your investment over the long term by investing mainly in growth assets.
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Income Fund
Aims to provide stable returns over the long term by investing in New Zealand and international fixed interest assets.
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Property & Infrastructure Fund
Focuses on growth of your investment over the long term by investing in New Zealand and international property and infrastructure assets.
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New Zealand Growth Fund
Focuses on growth of your investment over the long term by investing in quality New Zealand companies which can consistently produce increasing earnings.
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Australian Growth Fund
Focuses on growth of your investment over the long term by investing in quality Australian companies which can consistently produce increasing earnings.
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International Growth Fund
Focuses on growth of your investment over the long term by investing in quality international companies which can consistently produce increasing earnings.