NZ Funds Investment Report Q1/Q2 2018

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Investment Insight | The future of crypto mining is sustainable

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"As we discussed two weeks ago in our Investment Insight about Allbirds , we’re always looking for opportunities to buy shares in innovative companies at the IPO stage. This is why we’ve just invested in Iris Energy’s IPO on the NASDAQ. Iris Energy is a Bitcoin mining company with a difference: it uses only renewable energy to power its mining operations. "The total size of the Bitcoin mining industry in 2021 is estimated to be US$16bn, with significant scope for growth in the coming years. Iris Energy represents an important and necessary step forward for this industry: a future where crypto mining operations can make a meaningful difference to carbon emissions and to the communities they operate in..." Read more about Bitcoin's energy consumption and the investment case for Iris Energy below.
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Investing in a high inflation environment

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It was back in August of last year that I first referenced the growing inflation risk in New Zealand and labelled it the 'silent thief'. It is now official; the silent thief has arrived. Stats NZ 1 have confirmed that the Consumer Price Index (CPI) increased 5.9 percent for the 12-month period ended December 2021. This is the highest rate experienced over the last 30 years and anecdotal evidence suggests that many supply chain pressures are yet to peak. Offshore, the situation is similar with the United States CPI climbing to 7% in 2021. Like New Zealand, this is also a multi-decade high; in fact, it's the highest rate since June 1982. And perhaps more telling is that the United States central bank, the Federal Reserve, is no longer referring to inflation as 'transitory' but acknowledging the potential for it to be 'persistent'. OK, so no big surprise here; anyone who has been supermarket shopping over the last six months is well aware of this. At curr...
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Investment Insight | On the road higher

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As inflation and interest rates increase, bond portfolios have experienced volatility. Although market uncertainty can be challenging, it does present opportunities for investors. In this Investment Insight we are going to step back and discuss what determines the return investors receive from a bond. A bond is the same as any other asset in that its return is comprised of two components – the income it generates and the capital value of that asset. The first of these is simple to determine – the income you receive from a bond is the (typically fixed) coupon that a bond pays quarterly or semi-annually. It is the capital value of a bond that may lead to confusion. Its value can move in a way that is not initially obvious. A good way to describe the change in capital value is to use property as a comparison, as this is an asset class most people are familiar with. As well as being something we can own, a property can generate income through rent...
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