June 2022
Income Generator returned -0.5% in June. Since its October 2020 inception, it has returned -0.25%p.a. which compares favourably to the New Zealand share market return of -8.48%p.a. over the same period.
Since the start of the year, the Portfolio has significantly outperformed local and global share markets. The Portfolio is down -4.3% year to date compared to the New Zealand share market return of -16.3% and the global share market return of -20.0%.
In June, New Zealand shares were down -3.8% and Australian shares were down -8.8%. Expectations of higher inflation, rising bond yields, and the growing expectations of a recession next year continue to affect share markets.
The Income Generator strategy is designed to limit losses in a negative share market environment. Income Generator’s specific investments are heavily weighted towards high dividend paying companies with strong cash flows and reasonable valuations. These companies have avoided the worst of the 2022 sell-off so far, which has been led by high growth companies with expensive valuations.
We retain a higher level of downside protection in the Portfolio through futures and options hedges, as we anticipate further potential share market volatility.
Past performance is not an indication of future returns.
Year-to-date Return
30 June 2022
-Monthly Return
June 2022
Total Return p.a.
Since inception
22 October 2020
Income Generator is a fund invested primarily in premium New Zealand and Australian dividend-paying shares. It passes these dividends on to you as regular income.
The risk of fluctuating share prices is reduced through the use of tools including put and call options which reduce the fund's volatility. This means Income Generator is for investors who are willing to take on some risk, but do not wish to be fully exposed to the volatility of shares.
We expect Income Generator will become a core allocation in moderate to higher risk investment portfolios, and become an essential tool for New Zealanders with savings to invest.
* Past performance is not an indication of future returns. Expected average annual returns are based on modelled returns only, which may not be an indicator of future returns. For more information on the calculation of expected average annual returns, see the 'Other Material Information' document available on the Disclose website.
Level 16, 21 Queen Street, Auckland 1010, New Zealand.
New Zealand Funds Management Limited is the Issuer of the NZ Funds Income Generator.
A copy of the NZ Funds Income Generator Product Disclosure Statement is available on request or by visiting the NZ Funds website at www.nzfunds.co.nz.
