Lockdown Market Update - October 2021

Trilogy Financial Solutions advisers have been building diversified client portfolios for decades, which have seen many market cycles – both peaks and troughs.

In our latest update, Trilogy presents Maaike Van Tol of ANZ Investments (Co-Head of Diversified Portfolio Management) who provides her views and insights on the importance of a well-structured process when managing diversified funds.

Maaike is jointly responsible for managing diversified funds across ANZ Investments, which includes KiwiSaver, retail, whole and private bank portfolios. As part of this responsibility, Maaike is focused on the asset allocation process, which includes both strategic and tactical asset allocations.

In her update, Maaike highlights asset allocation, active investing, themes and trends in the market, and investment risks, along with some key, risk-management tips.

This video is for information purposes only and should not be treated as financial advice. To the extent permitted by law, ANZ New Zealand Investments Limited does not accept any responsibility or liability arising from your use of this information.

Lockdown Market Update - August 2021

Trilogy Financial Solutions in conjunction with Bevan Graham - Economist and Greg Flemming - Head of Global Diversified Funds from Salt Funds Management who share their thoughts on the current global markets and resulting investment strategies.

Market Update: June 2021

What happened

Prepared by MakaoInvestments on behalf of WealthpointLimited.

Global share markets reached all-time highs over the month of June 2021, brushing off comments from the US Federal Reserve (the Fed) that interest rates could rise sooner than expected amid rising inflation. The number of global companies valued at over one trillion US dollars increased to five during the month, with Facebook being the latest company to join the ranks. Meanwhile, Microsoft reached a market cap of over two trillion US dollars in June.

The continued spread of the COVID delta variant, which was first detected in India, resulted in a delayed reopening in the United Kingdom and new restrictions in Australia. On a more positive note, the share of the world population that has received at least one dose of a COVID-19 vaccine exceeded 20% over the month.

An economic data release during the month revealed that the US consumer price index rose higher than expected, to an annual rate of 5%. However, a third of the increase was attributed to used car prices recovering. As a result, this had a muted impact on bond yields.

The Fed communicated that they are retaining the stance that the current period of higher inflation is transitory, and therefore left interest rates unchanged. However the Fed signalled that interest rates could increase sooner than initially thought, citing a stronger than expected economic rebound. The outlook for rate rises was therefore brought forward from 2024 to 2023.

Although these comments prompted a spike in bond yields and the US dollar, the US 10 year ended the month 0.1% lower. The price of gold also declined, however crude oil prices continued to grind higher over the month, nearing levels not seen since 2014.

Closer to home, the Reserve Bank of Australia kept interest rates unchanged and while the Reserve Bank of New Zealand did not meet in June, they updated their Memorandum of Understanding with the government to include debt-to-income lending restrictions in their toolkit to combat the rapidly rising prices in the residential property market.

Global share markets reached all-time highs over the month of June 2021, brushing off comments from the US Federal Reserve (the Fed) that interest rates could rise sooner than expected amid rising inflation.

Looking back

Returns from NZ Fixed Income were flat as yields ended the month relatively unchanged. Over the last year the 10-year NZ government bond yield has nearly doubled, resulting in negative returns for NZ Fixed Income investors. Global Fixed Income investors fared better, with the asset class holding ground, but the annual returns for both NZ and Global Fixed Income are poor relative to history.

June was a positive month for equity markets. NZ, Australian and Global Shares all delivered a return between 2 and 3%. This was a continuation of the great performance from offshore markets over the last year. NZ Shares have been lagging significantly behind, however, both over the rolling quarter and the last 12 months.

New Zealand shares

With the exception of Auckland International Airport (AIA), a stock heavily dependent on the reopening of borders, all other stocks in the S&P/NZX 10 Index were up during the month of June.

Having experienced significant losses over the last year, A2 Milk (ATM) bounced back significantly over the month. This was a small step up, however, compared to the drop in the stock price that came on the back of continued supply chain issues and recent changes in executive management.

Overall, the stock is still down 68% from the end of June last year.

Similarly, Spark (SPK) and Fisher & Paykel Healthcare (FPH) also regained some of their losses experienced in prior months.