The New Zealand Growth Fund returned +2.2% in August, compared to its benchmark return of +1.7%. It was pleasing to perform ahead of the benchmark, given the swathe of updates in 'reporting season' from our June- and December-year-end companies. 

Xero (+18%) saw its share price rebound, along with many other global software companies, as an ongoing lack of evidence that AI is adversely impacting their business models saw a sharp improvement in investor sentiment. The company hosted its annual meeting in August, reiterating its current guidance and medium-term aspirations. It also hosted its flagship Xerocon event in Denver, which highlighted the release of further product features and a growing confidence that it can capture more of the lucrative US market, building on recent product development. 

Other positives from the month included Vista (+11%) and Fisher & Paykel Healthcare (+9%), which both improved their revenue guidance for their financial years. Delegat (+9%) provided maiden operating profit after tax guidance for its new financial year that demonstrates solid growth of up to 7% off the back of a strong recovery, which saw over 20% growth in the year ended June 2026. 

The biggest decliner in the portfolio was Freightways (-5%), which delivered a solid result for the year to June, but noted "the combination of higher fuel costs and softer customer demand created a drag during the final quarter on a result which was otherwise strong." Looking forward the company expects "it will be another year of 'softer for longer' than initially expected" and currently "trading conditions continue to be challenging". Mainfreight (-3%) and Infratil (-2%) also saw softer share price performance, having performed strongly in recent months off the back of positive updates.