New Zealand Growth Fund: 2015 in review

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New Zealand Growth Fund: 2015 in review.

Fisher & Paykel Healthcare has been one of the star performers in the New Zealand Growth portfolio again this year, with a total shareholder return of 32% year to date. The company epitomises what we look for in an investment: it operates in a non-cyclical industry with a strong demand tailwind, it develops innovative products for which there are growing international markets, and importantly, this demand translates into strong and sustainable earnings growth. Finding a company that offers both quality and earnings growth sounds easy, but it's not. F&P Healthcare is one of those rare companies and is among the largest positions in our portfolio.

We were very picky in selecting new IPO listings last year, missing many of the software related floats that have subsequently performed poorly this year. So we were disappointed that the share price of the only IPO addition to the portfolio, Metro Performance Glass, did not perform to expectations during this year. That said, as one of our smallest holdings it did not hurt performance materially, and the company is now starting to get good performance out of its new start-of-the-art Auckland plant. We added the company to the portfolio due to its dominant market position, national distribution and the strong structural demand for double glazing of existing residential homes. More recently the share price has started to reflect these factors and is now back close to its initial listing price.


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