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Morningstar NZ Economic Commentary Sept 2024

September Quarter 2024Summary • New Zealand cash and fixed-interest markets saw a larger rate cut predicated on persistent economic weakness. • New Zealand property still faces challenges from higher vacancy rates, but declining interest rates are a tailwind. • Australian and international property were strong, as easing cycles changed perspectives on the sensitive sector. • Global infrastructure outperformed equity markets on stimulus in China and the US. • Australian equities rose; h...

Economic Commentary September Quarter 2024

Markets rallied across the board in the September quarter as interest rates were cut by central banks.The US economy has continued to perform well whilst in NZ and many other countries growth remains weak.Global equities on a NZD hedged basis had the strongest return at around 30% in the year to June, followed by global listed property and infrastructure.Bond market performances were also strong with returns over 10%.Geo-political risks are ever presentThey can cause large short-term declines in...

Economic Commentary June Quarter 2024

Large-cap global equities performed well again this quarter, but performances elsewhere were quite mixed.Gains were strongest in US equities over the past year, reflecting the relative strength of the US economy and the AI boom underway. NZ equities have performed poorly as rates have stayed high and corporate earnings have taken a hit.Diversification as always remains essential across markets and asse...

The Tale of Three Students

In the world of academia, the journey of students is as diverse as the colours of the rainbow. Within any educational setting, one can encounter a spectrum of attitudes and approaches towards learning.Through three fictional characters; Andy, Brodie, and Charlie. We can look at one aspect of student behaviour, highlighting the differences in their approaches to challenges of meeting learning targets, and see how these attitudes to learning deadlines might also relate to other areas of their live...

Morningstar NZ Economic Commentary March 2024

• New Zealand economic growth remains weak.• Inflation is sticky outside of the Reserve Bank of New Zealand’s 1-3% target range. US inflation is also proving sticker than previously thought, pushing up long-term yields.• Future direction of NZ interest-rate decisions are still expected to be lower, given the restrictive nature of the current levels as evidenced by growth numbers.• Property markets continue to struggle in the face of rising interest rates.• NZ equities remain an under...

Economic Commentary March Quarter 2024

Large cap global equities performed very strongly again over the quarter despite the soft global economic environment. Gains were strongest in US equities over the past year, in part reflecting the relative strength of the US economy and the AI boom underway.More interest rate sensitive parts of the market, including listed property, infrastructure, NZ equities and standard duration bonds took a breather this quarter.Benchmarking PerformancesBenchmarks are tools used to assess the performance of...

Economic Commentary December Quarter 2023

Most asset classes performed well over the December quarter……as markets became more convinced that a global soft -landing scenario is the most likely outcome for the years ahead.Gains were strongest in US equities over the past year, in part reflecting the relative strength of the US economy.Interest rates were slashed to historic lows in 2008/9 and remained at exceptionally low levels until late 2021.Central banks believed until recently that the balance of inflation vs. deflationary risks ...

Morningstar NZ Economic Commentary January 2024

• Markets continue to embrace moderating inflation trends, allowing scope for central banks to lower interest rates modestly while delivering a soft landing for the global economy. That sentiment is vulnerable to challenge.• The onus will be on inflation outcomes to validate market expectations, with core inflation measures globally still elevated and slow to return to target.• Growth in New Zealand is weak, and inflation pressures are receding, allowing scope of an eventual loosening of m...

Morningstar Economic Commentary NZ October 2023

SummaryHigher-for-longer interest-rate policy settings from central banks have been accentuated by widening term premiums lifting longer-term interest rates.Interest rates are not high relative to their longer-term history, but the recent rise is the most significant increase over a three-year period since 1980.Growth and labor market conditions continue to support a soft landing.Given the material lift in interest rates of late, and lags between monetary policy and the real economy, late-cycle ...

How parents can teach scarcity to improve...

David Boyle - Mint Asset ManagementIn 1978 my mum bought me a Sanyo 2-in-1 cassette radio player. It was a game changer for me. That’s because, before getting the player, my only access to music was listening to 3ZB, watching my fav bands on RTR and Radio with Pictures or buying a 45 when I could afford it.  Now, with this new player and the advent of cassette tapes, I was able to go to the next level and not only listen to my favourite songs but play them again and again where and when I...

World Investor Week

The first week of October was World Investor Week and the New Zealand theme for World Investor Week 2023 is ethical investing which aims to empower investors to make decisions aligned with their values. “A goal without a plan is just a wish” Having a well-thought-out plan is an important first step in your investing journey.It means choosing to invest in companies or funds that have a positive impact on society and the environment, and avoiding those that cause harm or have negative effects....

Economic Commentary September Quarter 2023

Most asset classes suffered negative returns in the September quarter.The short end of the yield curve is offering compelling opportunities for bonds.Global equities have the strongest returns YTD; elsewhere performance is modest.Short duration and alternatives have been key contributors to portfolio returns.Asset class diversification reduces portfolio risk for a given return.Diversification occurs because markets have different drivers of return, they are not perfectly correlated.The best sour...

CC2023: Don't just hope, leave a legacy

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Morningstar Economic Update NZ June 2023

• Core inflation and headline inflation pressures are easing, but the former is glacial in pace and central banks are becoming more concerned that elevated inflation could be embedded in pricing behaviour.• Fixed-income markets are gravitating towards central banks keeping interest rates higher for longer, though they still expect some modest relief in 2024.• Equities have performed well, in part buoyed by economic resilience, artificial intelligence prospects, receding headline inflation,...

Economic Commentary June Quarter 2023

Global equity markets bounced higher again in the June quarter. This was in part due to continued evidence of CPI inflation moderating, but mainly because larger cap tech stocks rallied on the prospect that they will see another surge in profitability as machine learning and related ‘Artificial Intelligence (AI)’ algorithms are integrated into their core products and services.Global equities had the strongest returns, elsewhere performances were subdued.Global equities are now back around th...

GC2023

SUPPORTING INFORMATION22nd May 2023Thanks for attending our session in Tauranga, it was great to be able to share with you.We referred to the following links during the session:NZ Super payment rateshttps://www.workandincome.govt.nz/eligibility/seniors/superannuation/payment-rates.htmlRetirement Expenditure Guidelineshttps://www.massey.ac.nz/documents/476/nz_retirement_expenditure_gudelines.pdfMorningstar KiwiSaver Survey Research Reporthttps://www.morningstar.com.au/insights/funds/234920/kiwisa...

Magellan Infrastructure Presentation

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Should the recent US bank failures be of concern for my investment portfolio?

The short answer is no.You need not to be concerned about single company failures.  In a well-diversified investment portfolio that is actively managed the recent bank failures will have little or no impact.What happened?Silicon Valley Bank (SVB) was a large, and very unusual bank dealing almost exclusively with tech startups. SVB share price showed an incredible rise during 2020 and 2021. The stock returned investors around 180% in that two year period. During 2022 the market changed rapid...

Why confidence is affecting women’s retirement outcomes

David Boyle of Mint Asset ManagementConfidence is a funny thing. When I was younger, I got a Dragster (bike) for Christmas. I thought it was the coolest thing ever and it provided me with an air of invincibility. So much so that when I was at Cubs, I told my mates I could ride down the hill to the Den (a meeting house for Cubs) faster than anyone else.  Now, this was a steep hill and, to cut a long story short, I did indeed beat everyone down to the bottom. That said, it became apparent ver...

Morningstar NZ Economic Update March 2023

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Economic Commentary March Quarter 2023

OverviewBoth equity and bond markets bounced higher in the March quarter, following increasing signs that central banks are getting on top of inflationary pressures.  However, the pattern of returns was quite volatile.  Equity markets surged in January on the back of reducing interest rate expectations, only to sell-off most of this gain in February and into early March as the banking sector particularly, came under pressure with the failure of Silicon Valley Bank.  Later in March...

The Value of Financial Advice

The value of financial advice for your future retirement destinationThe new licensing of financial advice takes effect on March 15, here’s why it’s good news for consumersDavid Boyle :  Mint Asset ManagementAdvice can come in many forms, whether it’s from your parents, your doctor, or even your cab driver. However, the quality of advice, depending on the source, may not always be in your best interests.When I was growing up, I would seek financial advice from my mum and dad on most th...

Quarterly Economic Commentary Dec 2022

So long and good riddance to 2022.  War, inflation, rising interest rates, and economic bottlenecks led to poor returns in most asset classes. In fact, 2022 was unusual in the sense that equities and bonds both fell simultaneously by large amounts. Usually, bonds act as a safe haven when equity markets fall.  As a result, a balanced 50/50 portfolio of global stocks and bonds had its worst year for nearly a century (Figure 1).In contrast, asset classes that offer inflation resilience su...

Retirement: How much is enough? And are you on track?

Are you on track for the retirement lifestyle you’re envisioning? How much would you need to put aside to get there? When it comes to saving for retirement, one size doesn’t fit all. How much you’ll need depends on the lifestyle you’re aiming for, where you’ll live, your expenditure levels, the age you plan to retire, and a lot more. With so many factors to consider, identifying your ‘sweet spot’ is no easy task. But if your ‘golden years’ are just around the corner, now is a g...

Economic and Market Commentary Sept 2022

To read the full document please click the link below. Main points: Equity markets were mixed but bonds fell heavily.Currency markets had significant moves. Timing markets is difficult, but cash yields are becoming meaningful again.  Unhedged exposures performed relatively well. NZ and Australian equity markets were resilient. Fixed income returns were poor again.Alternative asset classes have added substantial value to portfolio returns....