The commentary below provides further detail and insight into the Fund returns.

Returns for 1-year on the Australasian Share Fund and International Share Fund were unusual. The strong returns followed a sharp fall in share prices during February 2020 and March 2020. These returns should be evaluated with caution as they are unlikely to be repeated and should not be considered a guide to expected future performance.

The Fund returns below show the returns compared to benchmark for the composite of the Trust Investments Group Investment Funds to 31 March 2020 and the Trust Management PIE Funds from 1 April 2020.

For more information on the Funds, please view the PDS and Quarterly Fund Updates


The Balanced Fund invests in the other five sector funds.  It maintains a moderate risk profile with a well-diversified target asset allocation of 35% Fixed Interest, 35% Shares and 30% Property.  The Fund has a strong focus on the distribution of income with moderate levels of investment risk. 

The Balanced Fund returned 2.7% for the three months to September 2021, and a strong 13.1% for the 12 month period.  On a rolling 5 year basis, the Fund has delivered an annualised return of 10.0% per annum. 

Financial markets delivered mixed performance for the three months ending 30 September 2021.  Global share markets generated positive returns, despite a late end of period sell-off.  The New Zealand share market outperformed many of the major offshore markets, supported by strong company earnings results.  Bond market retreated with long dated bond yields adjusting to higher levels as investors continued to factor in that less central bank policy support may be required in the future.

In terms of the outlook, a combination of the vaccine rollout, the lowering of social restrictions, and accommodative policy settings, should continue to support global activity.  Company profits are expected to remain strong, exceeding pre-pandemic levels.  Investors should, however, expect more modest returns from here given valuations across many asset categories remain relatively full and volatility could re-emerge.  We continue to recommend a well-balanced, high-quality portfolio, with a focus on sustainable income.

For the purposes of this report, the performance of the Balanced Fund is compared against the benchmark returns of the underlying funds, and in the case of the Property Fund against the NZX 90 Day Bank Bill Index + 2.5%.

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The Property Fund posted a gain of 5.3% for the three months to September 2021, to give a return of 18.2% for the 12 month period.

The potential impact on tenants emanating from the most recent Covid-19 lockdown has been a key focus for the Property team over the last quarter.  While the Covid alert level restrictions have impacted tenants, there is benefit of having been through this last year.  The Property team has established a “fair proportion” of rental relief with tenants and therefore were able to move quickly to provide support, and there has been a considerable level of communication with tenants over this period.

The level of rental relief has not been large, due to high of exposure to supermarkets and warehousing/industrial property.  These sectors have a combined weighting of 66% of the portfolio and are sectors that have performed well in the Covid environment.

The geographical diversification is another element that has reflected the resilience of the portfolio with almost 50% of the portfolio being located outside of Auckland.

At the end of August, 105 Wiri Station Road, Auckland, a property tenanted by HEB Construction, was revalued.  By way of case study, this industrial property was purchased by the Fund in an off market transaction in November 2018 for $20.1m.  The attributes of the property are very attractive with a long term lease, fixed annual increases, a quality tenant covenant combined with a 12 month rental bank guarantee, and located in an increasingly popular industrial area of Auckland.   The value assessed by the independent Registered Valuer in August for this property was $31.5m.  This is a good example of increased demand for quality industrial property, and the Fund is well positioned with assets such as this.

The defensive nature of quality assets and tenants continues to position the Fund well.

For the purposes of this analysis, the performance of the Fund is compared against the returns of the NZX 90 Day Bank Bill Index +2.5%.

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The Fund posted a return of -1.4% for the three months to September 2021, to give a return of -5.3% for the 12 month period. 

The New Zealand fixed interest sector, as measured by the Bloomberg NZBond Composite 0+ Year Index, fell 1.2% for the September quarter.  The 10-year NZ Government bond yield rose from 1.77% to 2.09% over the period, reflecting the lift in global yields during the quarter.  Government bonds outperformed corporate bonds earlier in the quarter, before underperforming later in the quarter as yields rose.

Second quarter GDP growth of 2.8% was much higher than the market expected, while, domestic consumer price inflation reported for the June quarter was also much stronger than expected.  Domestic labour market data reported in early August was particularly strong, with the unemployment rate falling to its pre-Covid low of 4.0%.  These positive data releases reflected strong domestic demand on the back of continued fiscal and monetary stimulus and house price growth, and added to conviction the New Zealand economy has been operating at or above its potential, driven by strong private consumption.

The Reserve Bank of New Zealand left the Official Cash Rate (OCR) unchanged at its August meeting, reflecting the entry of the Covid-19 Delta variant into the community and the swift move into lockdown.  This rate hike was eventually put in place in early October with the first rate hike in seven years, taking the OCR from 0.25% to 0.5%.

The benchmark return for the Trust Management ESG NZ Bond Fund is the Bloomberg NZBond Composite 0+ Year Index.

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The Fund posted a flat return of 0.1% for the three months to September 2021, and -1.7% for the 12 month period. 

Global bond yields were volatile over the quarter as positive but slowing economic growth data, pared with increasing concerns on the toll the delta variant of Covid-19 was taking on economies, led to a fall in interest rates early in the period.  However, lingering inflation concerns and speculation over an earlier end to accommodative monetary policy saw an increase in long dated yields during September, negatively impacting capital returns from bonds. 

In data, slightly softer than expected manufacturing and services data and a disappointing consumer confidence read indicated that the exceptionally strong rate of growth may have now peaked in the US.  In contrast, data showed US inflation had surged 5.4% year-over-year in July, with temporary supply chain imbalances driving the increase, while the US unemployment rate also continued to fall. 

At the highly anticipated Jackson Hole symposium in late August, US Fed Chair Jerome Powell signaled that he was supportive of tapering the Fed’s asset purchase program this year, but reiterated that rates will remain on hold for some time.

The benchmark return for the Trust Management ESG International Bond Fund is the Bloomberg Barclays Global Aggregate Index (100% hedged to NZ dollars).

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The Fund posted a return of 8.3% for the September 2021 quarter, to give an annual return of 29.4% for the year, strongly outperforming the market index return of 20.8% for the 12-month period. 

The New Zealand share market gained 5.0% during the September quarter, to be up 3.9% for the calendar year to date.  This strong result was despite New Zealand moving into a level 4 lockdown in mid-August, and mainly driven by a much stronger profit reporting season than market expectations.  Several healthcare companies (Pacific Edge +24%, Ryman Healthcare +15%, and Summerset +13%) were among the strong performers for the quarter along with logistics company Mainfreight (+26%) which continued its recent strong run.  Financials companies (NZX -15%, ANZ -3% and Westpac -2%) underperformed.

The Australian share market underperformed New Zealand’s, but still managed a solid gain of +1.7% (-0.8% in NZD) for the quarterly period.  Performance was driven by stocks in the energy and industrials sectors while the materials sector underperformed.

Among company specific news, the August profit reporting season was strong, with more companies beating profit expectations than missing, and several positing very positive company outlook statements.  Among the highlights, retirement village operator Summerset delivered a strong result, with underlying performance up and profit soaring on the back of property valuation gains.

The Fund has performed well this year in both absolute and relative to the performance of the benchmark index.  The Fund continues to be overweight the healthcare, technology, and consumer staples sectors relative to the benchmark index.

The benchmark return for the Trust Management ESG Australasian Share Fund is the S&P/NZX50 Portfolio Index.

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The Fund performed strongly, gaining 1.2% for the three months to September 2021, and 26.5% for the 12 month period. 

Global share markets, as measured by the MSCI World Index (in local currencies), rose 0.6% over the three month period.  Despite the impact of the Covid-19 Delta variant, global share markets were initially upbeat reflecting the widespread deployment of vaccines leading to healthy consumer spending, and the positive company reporting season, while monetary and fiscal stimulus remained ample.

In September however, share markets came under pressure as investors realised elevated inflationary pressures could see earlier monetary policy tightening from central banks, in turn slowing global growth rates.

Regionally, Japan, the UK and the US share markets gained 2.3%, 0.7% and 0.2% respectively, while the Brazil (-12.5%) and Hong Kong (-14.8%) share markets significantly underperformed.  From a sector perspective, financials and technology stocks were amongst the strongest performers, while materials and industrials companies lagged.

The US company earnings reporting season provided solid results, with around 90% of US S&P500 companies either beating or exceeding prior earnings expectations.  Continued sales growth from Alphabet, Apple and Microsoft were particularly impressive. 

The benchmark return for the Trust Management ESG International Share Fund is the MSCI World ex Australia Index (50% hedged to NZD).

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Returns are gross of management fees and expenses, and are annualised for periods of longer than one year. Past performance is not indicative of future performance and is not guaranteed by Trust Investments Management Limited, the Supervisor, or the underlying Investment Managers. For further information please refer to the Product Disclosure Statement and Quarterly Fund Updates at, further information can also be found at, under offer number OFR12861. Performance calculations for the Funds comprise the returns of the Trust Investments Group Investment Funds up to and including 31 March 2020 and for the Trust Management PIE Funds from 1 April 2020.


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 here.