A time to reflect
By Bruce McLachlan, Chief Executive
11 December, 2017
We are oh so lucky to live in New Zealand. Investors have never had it so good. Not only do we live in this amazing progressive country with a lifestyle to match, we are free to live our lives as we want and also get to spend our hard earned income as we see fit. And this year has offered opportunities such that 2017 has felt like an investment year like no other. Is it the New Zealand share-market being up 19% or the US share-market being up 18%? Or could it be interest rates staying at their lifetime lows? Is it A2 Milk going up nearly 400%? Is it the Fisher Funds International Growth Fund being up over 30%? You could be excused for thinking any of these could be the standout event in investing in 2017, but in reality all of these are indicative of the investing party that we have seen in 2017. In addition, there has been the crypto currency bubble taking Bitcoin from $1500 at the start of the year to $16,000USD now. Bring out the champagne if you speculated on Bitcoin!
Of great note has also been the recent release of the Legatum Prosperity ranking of 148 countries (see prosperity.com). This ranks New Zealand as the second most prosperous country in the world in 2017, behind Norway. In 2016 New Zealand was number 1 so our privileged position is not new. What this study does though, is rank prosperity across 9 broad based measures including business environment, governance, health, education, freedom and safety amongst others. We all know New Zealand is far from perfect, however sometimes we have to be reminded by others just how good we have it here.
Despite the very good times, 2017 has also been a year when the public have said they want changes. There have been concerns regarding those being left behind, housing affordability and the environment. That is the challenge for the new government, while not damaging the already high relative prosperity New Zealand enjoys.
So as we wrap up 2017, has Fisher Funds committed enough to the wishes of you, our clients? Investment returns have overall been very strong, and I have had only very favourable feedback from investors in that regard. 2017 has been a gem. We have had mostly favourable feedback (but not from all of you) to our new commitments on responsible investing and especially the ban on investing in thermal coal extraction. Overall, the Fisher Funds active management philosophy only investing in quality (and responsible) companies enables us to stay current with investor expectations, in a way that passive index tracking funds will never be able to do.
As we look forward to 2018 most investors understand many asset markets are at very high valuations. That does not mean in itself that the party ends with a crash, but does mean markets are unlikely to replicate the performance of 2017. The Fisher Funds investment team may have their work cut out to navigate through any uncertainty, but are up to the challenge.
Thank you for your custom in 2017. We are aware that our clients have many many choices of where they can invest their money, and we are very proud that you continue to support Fisher Funds. I know some of you were a little concerned with Carmel stepping down as Managing Director, and hopefully you can see we are continuing to build on the fantastic legacy Carmel and her husband Hugh created. Carmel is also keeping a watchful eye as she has continued as a Director!
From all of the team at Fisher Funds we wish you a fantastic holiday season, and look forward to continuing our association in 2018 and hopefully beyond.