Media

September 2020

Global equity markets have surged since late March. Against a backdrop of improving economic outcomes and unprecedented levels of policy support, the US S&P500 Index has rallied almost 46%, whilst the markets in New Zealand and Australia are up 38% and 31% respectively. Market cycles are always definable by specific factors and influences, but the current experience for investors has a number of particularly unique features.

I have recently taken over the portfolio management responsibilities for the Devon Dividend Yield strategy. As Devon’s Chief Investment Officer, I have always closely monitored the investment opportunities that existed in this space, but during the past month I have enjoyed the challenges that exist in building a portfolio of stocks which offers our investors a superior and sustainable income stream.

Devon Fund's parent company Investment Services Group (ISG) has donated $25,000 to the Auckland City Mission.

Over the past two months, we have written a number of commentaries with a view that equity markets would likely rally. They have. This has been an extraordinary time for everyone with respect to both concerns over the health implications from COVID and also the enormous disruptions to our everyday life and commerce. The consensus view was that investment markets would face a challenging future but, ultimately, they have behaved, with an efficiency that should give investors confidence. The question, as always, is where to from here?

1 May 2020

Please see below a quote from Mark Brown, one of our Portfolio Managers here at Devon Funds. Ful article by Tamsyn Parker of NZ Herald.

Sharemarket watchers are scratching their heads over the disconnect between the real economy and the recent bounce in share prices.

Economists are predicting the worst is yet to come, with New Zealand's unemployment level expected to rise to 9 or 10 per cent from record lows of 4 per cent, and business failures aplenty.

2 May 2020 Regardless of how well or badly you think the Government has executed the lockdown process to date, the focus must now be on limiting the level of economic damage that has been done, and for this we need much greater urgency, flexibility and pragmatism.

While, right now, New Zealand and Australia have almost identical Covid-19 health outcomes per capita, the economic damage in NZ has been much worse than is occurring in Australia.

5 May 2020 The strength of the recovery in equity markets over the past 5-weeks has been extraordinary. In fact, for the US S&P500, April was the strongest month of returns since January 1987. This has occurred at a time when governments, central banks and businesses are navigating the myriad of challenges associated with COVID-19, and yet investors have essentially been looking through the short-term economic uncertainty and have been actively buying stocks. The recent low in markets occurred on March 23rd.

3 April 2020

Every day that our economy remains in lockdown more long-term jobs are being destroyed.

6 April 2020 Markets such as these can be incredibly challenging for investors to navigate. To give you just one example from our local exchange in March, the broad S&P/NZX50 index returned -13%, but that return falls quite significantly to -20.6% if you take out the returns of just two stocks (Fisher & Paykel and a2 Milk). In this month’s interest piece, our Managing Director Slade Robertson revisits other major market events from his career to see what lessons can be applied to the current situation: