12/3/2020 11:00:00 PM

Fund Reviews: Diversified


Read the latest on our Conservative Fund.

Written by Mike Taylor,  Executive Director, Founder & CEO;


The Conservative Fund was up 0.9% for November, bringing the gains to 5.1% YTD versus the index of 3.8%.

While being a strong month for stock prices, bonds suffered during the risk on rush to recovery names. The NZ government 10-year rate moved from 0.55% to 0.9% during the month. As bond yields rise, it reduces the face value of a bond, as often the coupon is set. During the month we added Chorus to the portfolio on a yield of 2.51%.

On the positive side, the fund did have exposure to a number of recovery plays which performed very well during the month. This included property companies LendLease and Homeco in Australia, as well as JPMorgan, Disney and retailer VFCorp in the US. Locally, Z Energy finally started to lift off the bottom, its price having consolidated for over six months. Z trades on a projected forward dividend yield of around 8%. Interestingly, some of our Covid beneficiaries like HelloFresh and Etsy, while falling initially on the vaccine news, had recovered by month-end.

On the downside, our gold holdings suffered significantly during the month as gold is not typically a beneficiary during such times.

Next year, we will continue with the same strategy to deliver you a modest low-risk return and aim for the Conservative Fund to be a better option for you than cash and/or low-yielding term deposits.

Past performance is not an indicator for future performance. This is not intended to be financial advice and does not take into account any particular person’s circumstances. Before relying on this information, please speak to an independent financial adviser. Pie Funds is the issuer of the Pie Funds Management Scheme. For access to the PDSs, please click here.