During the past month, I’ve had the opportunity to combine family time with professional engagements in the UK and Europe. As the Chief Investment Officer (CIO), I find it crucial to immerse myself in the investment landscape by meeting companies, attending conferences, and collaborating with brokers and analysts. There’s no substitute for being in the trenches and rolling up my sleeves to keep my finger on the pulse.

The ongoing UK and French elections have been colourful and transformative. Voter preferences have shifted dramatically, favouring anti-establishment parties and leaders. While this has raised initial market uncertainties, it appears that a more moderate outcome is likely, which bodes well for investors.

In terms of performance, US large-cap tech companies, particularly chip makers like NVIDIA, have made significant moves. NVIDIA even briefly surpassed Microsoft as the world’s largest company. Investors in our KiwiSaver Funds and Global Growth 2 Fund benefited from this momentum. However, our UK & Europe small-cap fund faced challenges due to election-related jitters.

Globally, growth is slowing, driven by higher interest rates. Interestingly, New Zealand faces a tougher situation than other countries. Property prices have declined, inflation remains stubbornly high at 5%, mortgage rates hover around 6-7%, and government spending is being slashed. Consequently, our funds have intentionally limited exposure to New Zealand companies.

Lastly, despite the pandemic, travel is rebounding. Heathrow anticipates its busiest summer ever, with an estimated 30 million passengers - sometimes over 260,000 per day. Revenge travel—post-COVID wanderlust—is alive and well, even with higher prices. If you plan to visit national monuments, booking in advance is essential.

Mike Taylor
Chief Investment Officer