InvestNow News – 20th Mar – Pathfinder – Monthly Newsletter – February 2020

“We are doing very precise medical screenings at our airports. Pardon the interruptions and delays, we are moving as quickly as possible, but it is very important that we be vigilant and careful. We must get it right. Safety first!”  Donald Trump on Coronavirus containment measures

Market Commentary

Before we move onto market commentary, there has been a milestone development in the KiwiSaver industry.

In a bold call from our government, from 2021 default KiwiSaver funds won’t hold fossil fuel companies.

Climate change is a massive threat ? and our view is that aside from good for the planet, from a financial perspective, returns will be enhanced without fossil fuels. Energy companies are down significantly year to date and are by far the worst performing sector this year. Most recently the sector went into free-fall following an oil price war triggered by Saudi Arabia, as crude oil experienced its biggest drop since the 1991 Gulf War.

No fossil fuel companies in default KiwiSaver is a big call from the govt. We support no fossil fuel companies for our investors (according to mindfulmoney.nz our CareSaver is the only KiwiSaver genuinely having no fossil fuels). But should the government require this from all default KiwiSaver funds, or let investors decide?

Back to markets. It was a tough end of February in (and March is worse) investment markets with lots of excited commentators predicting doom and gloom. But that is the nature of investing for the long term.

The corona-virus has been unsettling markets for over a month now, so what changed to cause such a vicious market correction – with the US market experiencing volatility in line with 2008 in the Global Financial Crisis?

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