7th Nov 2019 – Mark Devcich, Chief Investment Officer

October saw stronger global markets, and weaker domestic markets in Australia and NZ. The NZX50 had a rare month of negative returns falling 1.3%. Power utilities’ share-prices suffered from Rio Tinto’s decision to announce a strategic review of the future of NZ Aluminium Smelters which caused jitters around over-supply concerns.

The US market continued to perform well ending up 2.2% in USD terms. The S&P500 is now trading at all-time highs again as reporting season in the US has been better than expected, there has been positive progress on a trade deal resolution and the outlook for jobs hiring in the US was robust.

The Australasian funds performed admirably with the Emerging Companies Fund the standout, up 4.3%. The fund benefited from takeover activity in one of its long-standing positions Konekt, which announced it was being taking over by private equity at a 69% premium, and the share price nearly doubled from where it started the month.

The Global and Climate Friendly funds had positive months, benefiting from decent results during the start of US reporting season. Some of the largest technology companies Google, Facebook and Microsoft, all held in Climate Friendly Fund, continue to perform well. Each of them grew revenues 21.5%, 29% and 14% respectively in the third quarter which is spectacular given their large market captialisation of 890 Billion USD, $552 Billion and $1.1 Trillion.

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