2017 End of Year



Ethical Screens Take Effect


Effective 1 February 2018 we introduced a number of changes to codify ethical screens across all Funds.

Investors will be aware that there are already ethical screens in place for the Sustainable Australasian Share Fund and the International Share Fund.

The changes introduced an identical ethical overlay to the New Zealand Bond Fund as is currently in place for the Sustainable Australasian Share Fund. The International Bond Fund solely holds sovereign bonds thereby avoiding investment in companies which may not meet our sustainability criteria.

The Property Fund now has an ethical overlay to the acquisition of properties, avoiding properties where the major tenant does not meet sustainability criteria.

To read the latest version of the Funds' SIPO and PDS which reflect these changes, please click on the below links.

Trust Management News and Articles

Show Me The Money

What your financial statements are telling you…

You may remember Cuba Gooding Jr.’s immortal line from the movie Jerry Maguire, “Show me the money!” Well, that’s what financial statements do. They show you the money. They show you where your Trust’s money came from, where it went, and where it is now.


Financial statements tell the money story of your Trust – what it has been doing and what it has to carry it into the future.


Profile: Anne Edwards
General Manager Finance

Anne Edwards, Trust Management’s General Manager of Finance, believes her thirst for knowledge, attention to detail and passion for the stories numbers tell are the traits that allow her to excel at her job.

Fund News

Strategic Asset Allocation - Balanced Fund


In October 2016, Trust Management reviewed the strategic asset allocation of the Balanced Fund in light of revisions to the long-term financial market assumptions of each asset class.


The review focused on the Fund’s allocation to International Fixed Interest, which had become a much less attractive asset class with a lower expected return and higher risk profile than assumed previously. 


Fund Returns


The Balanced Fund invests in the other five sector funds, maintaining a moderate risk profile with a well-diversified asset allocation of approximately 35% Fixed Interest, 35% Shares and 30% Property. The Fund has a strong focus on the distribution of income and its returns tend to be reasonably stable.

​The Fund returned a solid 3.3% in the final quarter of 2017, to give a 12.8% return for the calendar year. Share markets rallied over 5% in the three months, while Property and Bond markets also contributed positively.

The Fund’s strategic asset allocation was changed in December 2016, with a lower target weighting to International Bonds (10% from 20%) offset by higher allocations to NZ Bonds (25% up from 18%) and Australasian Shares (15% up from 12%). These changes boosted the year’s return by around 0.8%.

Global economic growth is healthy and synchronised and inflation remains muted, making for a constructive market backdrop. However asset valuations are stretched, monetary policies are becoming less accommodating, and long-term interest rates look to be on the rise. Investment returns over the next few years are unlikely to match those seen in recent years.

To 31 December 2017

Inception Date 01/06/2006


The Fund returned 1.3% for the December quarter and 9.4% for the calendar year. Valuations at year-end showed further increases for almost all the assets in the portfolio.

The value of the property assets in the portfolio increased to $108.8m at year end, boosted by the recent purchases of 2 Freight Place, an industrial property near Auckland airport, and a strategic freehold land holding at 421 East Tamaki Road.

Given its cash weighting of over 20%, the focus is to purchase further properties for the Fund, a strategy challenged by a lack of good quality assets being marketed for sale.

Although a number of full due diligences have been undertaken and offers submitted, some investors have been less prudent and happy to accept physical and/or lease impairments. We are confident that we will succeed in purchasing additional assets in the coming months.

The Fund continues to generate solid and consistent returns. There is a strong emphasis on the regular distribution of income via quarterly distributions.

To 31 December 2017

Inception Date 01/03/2001


The Fund returned 7.7% for the December quarter, compared to the benchmark’s 5.9%. The calendar year return was 32.8%, strongly outperforming the benchmark return of 23.7%.

The Fund’s outperformance in the quarter was driven by overweight positions versus benchmark in a2Milk, Serko, Gentrack and Syrah Resources, and an underweight position in Fletcher Building.  This was partly offset by underweight positions in outperformers Tourism Holdings and Sky City (nil holding) and an overweight position in underperformer Westpac.

Profit announcements and commentary during the quarter were generally positive in NZ and mixed in Australia. Growth stocks a2 Milk, Fisher & Paykel Healthcare, Ryman Healthcare and Auckland Airport led the NZ market higher. Fletcher Building underperformed after announcing further losses from large construction projects. Xero underperformed after announcing its plans to delist from the NZ market.

With overall market valuations elevated, the potential is for lower local equity market returns than those seen in 2017. A gradual rise in long term bond yields may take the edge off investor demand for NZ and Australian yield-oriented stocks.

The Fund has an ethical screen in place whereby stocks whose major activities involve alcohol, tobacco, armaments, pornography and gambling are excluded from the portfolio, along with companies involved in the production and/or extraction of fossil fuels.

To 31 December 2017

Inception Date 01/12/2002


The Fund returned 6.4% for the December quarter (benchmark 6.5%), to give a strong 20.7% return for the calendar year (benchmark 20.4%). The world’s major share markets were supported by synchronised economic growth, positive trends in company earnings and continued low inflation. Geopolitical factors and monetary policy tightening failed to disrupt the uptrend.   

​In local currency terms, the US market was up 6.1% for the three months, while the Japanese market gained 11.8%. The Fund also benefited from a further weakening in the NZ dollar.   

​The strong rally over the last year, relatively full valuations, and the prospect of higher long-term interest rates all point to lower returns from here than those seen in recent years.

The Fund invests in an indexed product that excludes companies involved in the manufacture of tobacco and controversial weapons. This product tracks the MSCI World ex-Australia Index excluding these sectors of the market. The Fund’s foreign exchange exposures are 50% hedged to NZ dollars.

To 31 December 2017

Inception Date 01/12/2005


The Fund returned 1.4% for the December quarter (benchmark 1.7%). The return for the calendar year was 5.2% (benchmark 5.5%).

Long-term yields in the NZ market fell over the three months, in line with the trend in Australia, although bucking the rising trend in the US market. The yield on the Government Stock 2027 maturity closed the year at 2.72%, down from 3.33% at the start of the year and a low of 2.12% in August 2016.

Continued low inflation (1.6% for the year) and little expected change in short-term rates means that long-term yields in the NZ market will likely be driven more by trends offshore.

​The Fund remains defensively positioned with a duration profile around a year shorter than the market benchmark. This strategy slightly reduced the Fund’s capital gains in the last year, but will moderate capital losses if interest rates rise. We continue to expect long-term yields to move higher in coming months and offer better investing opportunities.

​The Fund’s strategy prioritises the level and stability of distributed income.

To 31 December 2017

Inception Date 01/09/2005


The Fund returned 0.9% for the quarter, in line with the benchmark’s 0.9%. The calendar year return was 3.0% (benchmark 3.1%).

Long-term sovereign yields in the major markets moved in various directions in the quarter. The yield on US 10-year Treasuries rose 0.08% to 2.41%, but yields in Japan and Germany dropped slightly and the UK and Australian markets saw yields fall by close to 0.20%.

Although global inflation remains low (2.1% in the US, 1.4% in Europe and 1.0% in Japan), inflationary pressures look to be gradually growing and monetary policies are expected to tighten. Current yields remain very low by any historical comparison and generally offer little, if any, margin over inflation. We expect returns for the Fund to be modest until rates move somewhat higher.

​The Fund invests in an index fund that invests only in sovereign securities. This product tracks the FTSE World Government Bond Index hedged to Australian dollars. A further hedge is applied to hedge the Australian dollar exposure back to NZ dollars. Returns tend to lag the benchmark slightly as the cost of hedging is excluded from the benchmark return calculation.

To 31 December 2017

Inception Date 01/09/2005

Under the Financial Markets Conduct Act this communication may be deemed to be an advertisement for an offer of units. Trust Investments Management Limited is the issuer of the units to be issued under the offer to which this advertisement relates. A product disclosure statement for the offer, which sets out the terms and conditions of the offer, is available, and can be obtained at www.trustmanagement.co.nz/investment-products.