2025 Annual Review Letter for Membership Fee Clients

Investment Markets

2024 saw the ‘revenge of the markets’.  The downturn started in January 2022, closely followed by the Russian invasion in March 2022.  Inflation was racing, which led to interest rates being increased and as with all ‘bear markets’, it took a number of months for the markets to fight their way back into positive territory.

The average bear market lasts for 20 months from peak to trough.  The Magnificent Seven started roaring ahead in early 2023, but it wasn’t until November 2023 that the rest of the companies started recovering and putting on value and increasing profits.  From January 2022 to October 2023 we had a 22 month bear market (excluding the Magnificent Seven).[1]

The current bull market started in earnest at the end of 2023 and we have seen terrific returns in 2024, reflecting the health of economies around the world (not New Zealand, but your portfolio has very little exposure to New Zealand apart from Fixed Interest).

The world is now anticipating a four year Trump Government.  What we do know is that Trump considers the stock market to be his job performance score.  He is doing a good job if the stock markets increase.  Whilst it may be difficult to separate your feelings about what a Trump Government means for people in the USA and other countries, our job is to focus on what it means for your investments. 

At this stage, we don’t have any concerns about your investments, and we are continually monitoring the fund managers that we have recommended to ensure that they are doing their job, and are tracking, analysing and assessing the global environment continually, and incorporating the outcomes in their investment decisions.

Investment Platform change around June/July 2025

As you will be aware, after 18 years using the ANZ OneAnswer WRAP platform, we are moving to the much more modern technology – NZX Wealth Technologies.[2]  We only need you to sign three forms to make this change, but we consider that there will be many benefits for you.

If you log in to review your portfolio, you will see a better interface, with more information (these logs ins will be sent after everything is bedded down, maybe a month or so after).  There are many more tools available to us on the platform that we will gradually incorporate.

But the things you need to know are:

1.    Your investments are not sold down and reinvested, they are transferred as they are.

2.    There will be a ‘trading freeze’ for around 4 weeks after the transfer and for a time period after the transfer.  What this means for you is

a.    If you are making regular contributions, we will move these earlier onto the new system, so that you don’t have any delays (otherwise we might have to suspend the investments for a period of 4-6 weeks)

b.    If you have regular withdrawals, we will manually pay you several months of withdrawals to make sure you don’t miss any before we move then start them again when the new system is operational

3.    We are able to define the amount of GST that is assessable on your fees on this platform.  This will be a reduction in GST cost to you, we have outlined how much of a saving that is for you in the Steps to Take Now.

4.    It is likely that the historic performance will only be available for one year from the date of transfer.  However, we have backed up all your transactions and historic performance for the time period that it is available to your client file, if it is ever needed.

5.    If you have term deposits that mature after the move that are with ANZ, BNZ or Westpac, we can’t move these to the new platform.  They will remain on the old platform but we will mirror them on the new platform for reporting

Taxation changes from 31st July 2024

These tax cuts apply to everyone, and it is IMPORTANT TO NOTE that these will also apply to your PIR (Prescribed Investor Rate) for your PIE (Portfolio Investment Entity) investments (eg in your portfolio and KiwiSaver, and if you have a PIE Cash or Term Deposit investment with your bank.

These changes will have applied from 31st July 2024.

Project 2025

Continuing with our series of education on how your fund managers make their investment decisions, this year we are telling you about BetaShares – one of our two ‘defined index’ or passive investors. 

The main discussion that we are having this year is about scams.  What you need to do to protect yourself (and for you to share this with other people you care about in your lives).

We have also been working on how we can be around for many more years to work with you, so we will update you on our work/life plans – including more annual leave (where we will still be available if needed) and a 4-day week from 2026.

We are taking on new clients and would love referrals from you[3]

Please note that we have also updated the layout of our Investment Rebalancing, we hope that this is more user friendly.[4]  We have changed our investment research provider to Mapua Wealth (from Morningstar) which is reflected in this updated information as well.

We look forward to seeing you at our annual review meeting this year.  Please don’t hesitate to contact us if you have any queries before our meeting.

Carey, Peter and Paul

[1] Apple, Amazon, Alphabet (Google), Meta (Facebook), Microsoft, Nividia and Tesla.

[2] New Zealand Stock Exchange Wealth Technologies (NZXWT)

[3] Some minimum investment conditions may apply.

[4] Thank you Tony for your help