Macroeconomic and Strategic Update: Chiti's discussion with Milford
Mark is the Portfolio Manager of a number of Milford funds in addition to responsibility for managing the Central Dealing Desk.
Chiti closed the discussion with a few key messages:
Diversify your portfolio.
Stay emotionally disciplined and stay invested.
Follow the data; don’t follow the hype.
Your investment time horizons and cash flows are important.
Get some good advice (feel free to contact us).
In this update, we have covered the following topics:
Market volatility
Changes to the Active Investor Plus Visa program
End of tax year reminders
If you would like to discuss your current portfolio, maturing term deposits, retirement planning needs, or any other financial matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.
Sincerely,
The Team at Trilogy Financial Solutions
Market volatility
Mixed global performance: February saw global stock markets largely trading within a narrow range and finishing the month with losses overall. The S&P 500 and the tech-heavy NASDAQ both declined, while European markets showed positive performance. The weakening New Zealand dollar lessened the impact of US market losses for NZ investors, resulting in a smaller decline for the S&P 500 in NZD terms.
US instability: A mix of worsening US economic indicators, including persistent inflation (evidenced by higher CPI) and sluggish retail sales signalling a consumer retreat, alongside unclear government policy, contributed to instability in US equity markets."
Trump’s effect on market volatility: Donald Trump’s policies regarding tariffs, particularly regarding tariffs on imports from Canada, Mexico, and China, have caused sharp declines in stock markets worldwide. The uncertainty surrounding these policies has led to a selloff, erasing $1.7 trillion from the S&P 500 and causing the tech-focused Nasdaq-100 to experience its worst performance since 2022. Trump's flip-flopping on tariff implementation, such as temporarily postponing new tariffs on Mexico and Canada while doubling those on Chinese goods, has further unsettled investors.
Geopolitical risks: The collapse of Syria's Assad regime has destabilised the Middle East, raising fears of potential Israeli action against Iran. The Ukraine-Russia conflict persists despite diplomatic efforts, while North Korea's aggressive stance and alliance with Russia have heightened tensions in East Asia. Additionally, a surge in cyberattacks targeting critical infrastructure and financial systems has emerged as a significant threat. These developments have particularly impacted the energy, defence, and technology sectors, creating a challenging environment for investors navigating the complex interplay of global political risks and market dynamics.
The good news: Your portfolios are well diversified, and the underlying managers we have selected are actively managing and constantly making changes to your portfolio.
A path to residency for investors
Last month, changes were made to the Active Investor Plus Visa. This visa is available as a way for overseas investors to obtain residency status in New Zealand.
Below is a summary of the key changes.
Active Investor Plus Visa Program Overhaul
Aims to increase accessibility and attract more investors.
Addresses concerns about high investment thresholds and focus on risky investments.
Two New Categories
Growth Category (NZD 5 million):
Invest in approved managed funds/direct investments.
Minimum 21 days in NZ over 3 years.
Balanced Category (NZD 10 million):
Invest in acceptable investments (bonds, equities, philanthropy, property, Growth Category investments).
Minimum 105 days in NZ over 5 years.
The above duration can be reduced by making additional investments.
What’s different:
Removal of English language requirement.
Greater flexibility and lower financial commitment for Growth Category.
Balanced Category offers a lower-risk option.
Other details:
The new Active Investor Plus Visa program opens 1st April 2025.
The government is reviewing Foreign Investment Fund (FIF) tax rules to further attract investors.
If you know anyone considering a move to New Zealand who might qualify for the Active Investor Plus Visa program, please pass along this information. We can also provide investment services to help them meet the program's requirements.
For more information, please visit their website.
End of tax year reminders
Just a quick reminder to ensure your Prescribed Investor Rate (PIR) is accurate for your Portfolio Investment Entity (PIE) investments before the tax year ends on 31st March, 2025.
Why is this important?
Accurate Tax: Your PIR directly determines the tax you pay on your PIE investments. Incorrect rates can lead to overpayments or underpayments.
PIR Calculation: PIE tax is calculated based on your specific PIR.
Need to check or calculate your PIR?
Refer to the following PIR table:
If you need help to calculate your PIR rate, please click here.
Action required:
Please review your PIR details.
If you believe your PIR is incorrect, please contact us immediately so we can update this information on your PIE investments managed through us.
Ensuring your PIR is correct will help you avoid any potential tax complications. Thank you for your prompt attention to this matter.
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