"At NZ Funds, we have a modern, diversified approach to investing. Diversification is one of the key tenets of finance. It improves risk-adjusted returns over time and is often referred to as the only ‘free lunch’ in financial markets. Put differently, the inability to diversify leads to inferior risk-adjusted returns. "We take this approach so we can find long-term growth for our clients, wherever it may be in financial markets. But it is also about preserving as much of our clients’ capital as possible, especially when markets in traditional asset classes go through big cyclical shifts. This is exactly what we’re currently witnessing in global bond markets with the rise in interest rates and inflation. We use futures contracts to manage this shift..." Read the full story about why bond markets are falling and are expected to fall further below.

"At NZ Funds, we’re constantly looking for innovative companies to invest in, particularly at the IPO (Initial Public Offering) stage. Investing at the 'ground floor' level gives our clients the greatest chance of benefiting from long-term growth in company share prices. It’s rare to be presented with the opportunity to back a new NASDAQ listing that also has strong New Zealand connections. This is one of the reasons we were delighted to make a successful bid for shares in Allbirds (NASDAQ: BIRD), which has grown from a Kickstarter campaign by its Kiwi cofounder to a global footwear and apparel company with a US$3.1 billion market capitalisation..." Read the full story about NZ Funds' IPO investment in Allbirds below.

In the first Investment Insight of each month, we will look back at the key themes and trends for the previous month; and forward, setting out our views on what will affect client performance in the months to come. Persistent supply chain constraints are weighing on the path of the recovery and feeding fears of longer lasting inflationary pressures. However, the growth outlook remains firmly underpinned by huge levels of pent-up demand, solid corporate balance sheets and robust investment intentions. Meanwhile, income assets and property are under pressure from rising interest rates. Those who cannot manage duration risk are already suffering large negative returns in their income assets. October was a tale of two halves, but we retain our conviction as we fast approach the end of 2021. Interest Rates October proved to be an eventful four weeks for interest rates. Markets have been wary of the spectre of rising inflation for some time. However, a ru...

NZ Funds was the first fund manager to add crypto to KiwiSaver. On 8 September 2021, Parliament’s Finance and Expenditure Select Committee heard evidence as part of their inquiry into the current and future nature, impact, and risks of cryptocurrencies. CEO Michael Lang presented the business case for including cryptocurrencies as part of a well diversified investment portfolio. The document accompanying NZ Funds’ submission can be read  here . Watch the full video of the Select Committee session  here . Alternatively, please read NZ Funds' full Submission to the Finance and Expenditure Committee below.

The Polar Vortex is a large area of low pressure and cold air around the Earth's North Pole. It's a long-documented weather pattern that typically goes unnoticed by those of us not living in the Arctic Circle, except for when occasionally the air pressure and winds shift. In this Investment Insight, we talk weather. We discuss why climate change induced weather events are having a direct impact on increasing energy costs. Finally, we explain how weather will influence the returns generated by positions we hold in natural gas and heating oil. What is a Polar Vortex event? When stable, the Polar Vortex remains closer to the North Pole, constrained by a strong polar jet stream which keeps the cold air from moving into the mid-latitude continents below i.e., Europe, United States, China (the 'Continents'). The polar jet stream is sustained by a temperature difference between the Continents and the polar region. When the temperature difference across the j...

Many investors are worried that another share market crash is just around the corner, and this prevents them from taking the step of investing at least a portion of their savings into the share market. While sudden declines are risks that need to be faced occasionally in investment markets, they are less frequent than many anticipate. What investors should be worried about is a more real and pressing risk lurking in assets they see as being low-risk. This is the impact of increasing interest rates, which will cause a slow but prolonged decline in the value of most bonds. The sudden global shutdown in March and April 2020 saw governments announce record recovery packages and some of the largest budget deficits since World War II. At the same time central banks slashed interest rates to zero. These actions aimed to support economies and encourage growth, and while the pandemic has continued for longer than many had envisaged, these actions have had the desired effect. Ec...

A younger colleague recently asked me what has been the greatest technological development in my working life. Apart from the unsettling realisation that this clearly means I am considered old, I thought it was a fascinating question. After some internal debate about the internet vs the smart phone, I settled on the smart phone. Immediate access to a universe of information, location data and of course global communication, all in the palm of your hand – something straight out of the original series of Star Trek. This question caused me to reflect on the value of immediate access to information – when it is helpful and when it can be unhelpful. With the returns from fixed interest investments currently sitting at 30-year lows, many of the models that drive the design of investment portfolios have been reweighted towards higher risk assets. They now include a higher allocation to more volatile share investments to try and compensate for the lower returns be...