NEW ZEALAND
GROWTH FUND

The NZ Growth Fund posted returns of -12.6% in March, outperforming the local share market which returned -13.0% (S&P/NZX50G). 

There have been clear winners and losers in the portfolio over the month with some companies experiencing better prospects as a result of the coronavirus crisis and others in the eye of a storm. 

Fisher & Paykel Healthcare (FPH), as a leading global provider of respiratory equipment, is important in helping combat COVID-19. Demand for its products is strong. Accordingly it’s share price bucked the negative trend rising 17.8% for the month. It is positive, both for shareholders and patients, that FPH had flex capacity on hand so it could ramp production to meet increased demand. The company has been able to boost output in its hospital division by 30% with just two weeks lead time .  We are proud to have Fisher & Paykel Healthcare as the biggest position in our portfolio.  

Cinema software provider Vista (-63.3%) is right in the eye of the COVID-19 storm.  And given almost every cinema globally is shut and they are all Vista’s customers and most are not paying Vista, this is very painful.  We have spoken to Vista's management and board a number of times and also had calls with multiple global cinema chains. We have modelled the monthly liquidity position to ensure the company can survive if the current situation is drawn out and are comfortable management and the board are making the right  decisions to guide the company through tough times. The long-term story and moat around Vista’s core cinema business is intact.