7/8/2021 12:00:00 AM

Fund Reviews: Diversified

Written by Mike Taylor,  Founder & CEO


The Conservative Fund was up a respectable 1.1% for the month, with a 12-month rolling gain of 5.8%, which compares favourably with the long-term return of 4.6% since inception.

Surprisingly, long-term interest rates fell during the month as it appeared that investors were overly enthusiastic about how sustainable inflation might be and, as a consequence, how quickly central banks will hike rates. As we saw in June, Covid still has the potential to disrupt daily life and as a consequence central banks will remain cautious about when to start the tightening cycle. That said, a modest amount of rate rises is now priced in to occur by the end of 2023 in both the US and NZ.

For July, I would anticipate interest rates to remain range-bound until later in the year when we will get a clearer direction from data. The next big data point is Jackson Hole, (I’ve visited, and it is), one to put on the bucket list for when the borders re-open. Jackson Hole is the location of the US Fed Economic Policy Symposium, or “strategy week”, where governors get together in August to debate monetary policy.

Equity wise, there’s been some good with some bad. ASX-listed property company HomeCo made new highs before succumbing to the lockdown-related sell off, which also affected the fund’s holdings in Flight Centre and Webjet. I’ve exited US pharma Abbott Laboratories at a small loss after they downgraded earnings citing reduced demand for Covid tests. In Europe, HelloFresh traded to a new high, and finally, another strong month for oil is providing a strong tailwind to the fund’s energy companies.

The quarterly distribution of 0.5 cents per unit was processed on 30 June and should now show in your investor portal.

Information is current as at 30 June 2021. Pie Funds Management Limited is the manager of the funds in the Pie Funds Management Scheme. Any advice is given by Pie Funds Management Limited and is general only. Our advice relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees, like brokerage, if you act on any advice. As manager of the Pie Funds Management Scheme investment funds, we receive fees determined by your balance and we benefit financially if you invest in our products. We manage this conflict of interest via an internal compliance framework designed to help us meet our duties to you. For information about how we can help you, our duties and complaint process and how disputes can be resolved, or to see our product disclosure statement, please visit www.piefunds.co.nz. Please let us know if you would like a hard copy of this disclosure information. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary.