Home' New Zealand Golf Magazine : NZGM January 2014 Contents Inflation
While inflation is currently low, a number of factors will start impacting the costs of goods and services.
• The building boom means supplies of building materials (much of which are sourced from overseas) are in
high demand. This demand will push prices up, not just for materials but also for labour.
• The demand for labour across all sectors will see upward pressure on wages.
• The increase in demand for goods and services from NZ and global consumers will start pushing prices up
as producers have greater leverage over distributors.
The Reserve Bank of New Zealand has indicated rates are likely to rise this year. Most market commentators
predict the first upward rate movement will happen in the March 2014 quarter and over the course of the year
rates could increase by over 1%.
This would have an impact on most households but may also push the value of the NZ dollar up which brings
challenges to the export sector.
In summary 2014 should be another good year for the New Zealand economy. Globally we expect to see a
sustained recovery in America and a gradual improvement in Europe. The Chinese economy will continue to
grow but this growth will slow over time. A healthy Chinese economy is important to New Zealand as it is now
our largest (and fastest growing) trading partner, importing not just dairy products but also a growing range of
products including wine, honey and wood.
For investors the relatively high value of many New Zealand companies as well as the impact of a number
of headwinds on each sector will mean generating returns will become more difficult than recent years.
Stock picking and active management will continue to be extremely important as far as achieving superior
investment returns is concerned.
Jonathan Windust is a Portfolio Manager at Milford Asset Management. He is responsible for the investment
management of the Milford Balanced Fund and Milford Income Fund as well as the Milford KiwiSaver Balanced
Fund and Milford KiwiSaver Conservative Fund.
Milford manages over $2.5 billion on behalf of its clients.
Disclaimer: The information in this article has been provided in good faith and is not intended to provide
professional advice. It has been derived from sources that are believed to be accurate at the time of writing. For
a copy of the Milford KiwiSaver Plan Investment Statement or the Milford Unit Trust PIE Investment Statement
please call 0800 662 347 or visit www.milfordasset.com.
Past performance is not a guide to future returns. The Milford
Balanced Fund was launched on 1 April 2010. Morningstar terms and
conditions can be viewed at milfordasset.com/terms-and-conditions.
Minimum investment is $10,000.
“If the markets
don’t change then
neither will the
But that day hasn’t
Balanced Fund Manager, Milford.
Diversification. Most people agree it’s the
sensible thing to do, and the Milford Balanced
Fund is an ideal way to leverage its benefits.
The Balanced Fund invests in top -performing
and award-winning Milford funds along with
allocations to global equities, fixed interest and
cash to create a comprehensively diversified
portfolio. Milford adjusts the investment mix
regularly to capitalise on market movements.
Surprisingly this is not something all fund
managers do. But Milford does because it
believes the best way to deliver better and
more consistent returns is to adopt and apply
the principles of active portfolio management
along with investment diversification.
Annualised returns since 1 April 2010
Milford Balanced Fund
Morningstar Multisector Balanced PIE category
To learn more, or to invest, call us on
0800 662 347 to request an investment
statement or visit milfordasset.com/funds
Since it was launched, the Milford Balanced
Fund has returned 10.4% per annum as
at 30 November 2013. It is the best
performing Fund in its Morningstar
category over three years.
Fund Manager of the Year 2013 New Zealand
Source: Morningstar. Returns are calculated
after fees but before tax.
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