In the 12 months up to 31 March 2021, our KiwiSaver Growth Strategy achieved 107% returns. Over the last three years it returned 25.42% per annum after fees but before tax; and over the last five years 18.85% per annum, making it the top performing KiwiSaver fund in New Zealand for much of that time. To celebrate our 12-month performance and let the public know about it, we booked advertising billboards in Auckland and Wellington. Late last week, the FMA contacted KiwiSaver providers to let them know they were concerned that the advertising of 12-month returns to the end of 31 March 2021 could create a potentially misleading picture in customers’ minds about KiwiSaver performance. This is because we’re now more than a year on from the bottom of the COVID-19 sell-off in March 2020. The sell-off saw dips of 30% or more in market indices around the world, and this was followed by a period of exceptional growth. The reporting and advertising of annual returns has been an industry-

I have some sympathy for our Government as they try to slow our overheated domestic property market. This crisis has been 30 years in the making. The perfect storm of limited supply, high construction costs, population growth and a tax system that has supported property investment have together created the perception that property can only increase in value. And when you add in record low interest rates, it should be no surprise that New Zealand is now recognised as being one of the least affordable countries 1 in which to buy a home. With so many factors supporting property prices, you have to pull exceptionally hard on any single lever if you are going to have any chance of slowing the market. Last month, the Government announced its latest 'broadside' on property as part of its housing policy statement. The extension of the Brightline Test from 5 to 10 years was somewhat anticipated – however, the progressive removal of the deductibility of interest as a business cost

NZ Funds has invested in Ethereum, the second largest cryptocurrency by market capitalisation after Bitcoin. Like gold, Bitcoin has solidified its lane as a store of value in which we continue to have conviction. We are excited to help our clients participate in Ethereum which forms part of our cryptocurrency investment strategy. We believe cryptocurrency is at the centre of the digital transformation the global economy is embarking on. What is Ethereum? Ethereum is a platform that aims to make it easier to create applications that are not managed or controlled by one entity, which is called being ‘decentralised’. Ethereum uses blockchain in a similar way that Bitcoin does to record its history and provide a proof that a transaction has taken place. Ethereum goes a step beyond Bitcoin in that it uses blockchain and code to provide proof of more complex transactions, not just the transfer of monetary value as Bitcoin primarily does. Ethereum was created in 2013 by Vitalik

Like many industries, investment management is good at using jargon to make things sound more complicated than they are. One such example is ‘mosaic theory’, which refers to a research methodology where the conclusion is arrived at by piecing together many bits of publicly available information. Individually each piece of information may be interesting, but not especially useful - however, when put together, they act like jigsaw pieces revealing the whole picture. This is one of the strengths of NZ Funds’ approach. We utilise our expertise, diverse experience, and the different asset class focus within our investment team – combined with observations from our international managers (MFS, Fisher Investments, Suvretta and Emersion Point) and our advisory partners – to build a picture of the investment environment. The emerging picture is that, in our view, the global economy is currently on course for an explosive recovery that has not been seen for many years. Why do we have this