It’s not a big part of what we do (we have around 65 KiwiSaver clients out of a total active client base of some 350) However, it is a growing part of what we help clients with. (More people are becoming actively interested in their retirement provisions).
If you are dissatisfied with your current KiwiSaver provider, send me back an email and I will be in touch to outline what Generate could possibly do for you. (No obligation of course).
Extracts from May’s Generate KiwiSaver newsletter:
Facebook was a standout performer over April returning 22.7% in local currency terms. Facebook found favour with investors over the month as varying forms of lockdown policies around the world drove higher social media usage amidst a surge towards online gatherings and communications.
Alongside this, sat a counter view Facebook’s advertising revenue may come under pressure as companies reduced marketing budgets.
Reflecting similar sentiment to that shown towards Facebook was Alphabet, the parent company of Google which returned +15.9% in local terms last month.
Other notable mentions were Microsoft which was up 13.6% and Siemens AG which returned 11% in April. Berkshire Hathaway was somewhat off the pace as they carry more direct exposure to cyclical aspects of the economy, but still returned a positive 2.5%. We continue to think Berkshire is being undervalued by the market.
Turning to Property and Infrastructure, and after an uncomfortable month in March there was a strong bounce back in share prices. Auckland Airport (AIA) returned 22% over the month, which included the successful equity capital raise of $1.2bn at a price of $4.66 per share.
Notwithstanding the fact that travel will face difficult months to come, purchasing a recapitalised AIA at a steep discount to recent valuations proved attractive
A second standout was our long-held position in Infratil (IFT) which returned 17.6%.
A key detractor from P&I performance was Precinct (-6.7%). Precinct owns office assets in Wellington and Auckland including the soon to be completed Commercial Bay tower and retail precinct. The office sector has come under the spotlight as cities across the globe entered various forms of lockdown and work from home situations. As a result, some market participants, including the investment team at Generate, are pondering what office demand may look like in the future and whether there may be a structural shift in work methods resulting in lower demand for office space.
Also worthy of a mention is A2 Milk, which we discussed in last month’s newsletter. A2 continued its strong performance from March into April returning 14.2%. Additionally, our recently established position in Vector rose 11.4%, and Aventus bounced following March’s difficulties, rising 15%. We discuss Vector more fulsomely in our Stock Spotlight section below.