1 00:00:00,080 --> 00:00:01,640 Speaker 1: Some good economic news in the form of the New 2 00:00:01,760 --> 00:00:05,200 Speaker 1: Zealand Superfund, which continues to provide excellent returns for the 3 00:00:05,240 --> 00:00:08,520 Speaker 1: country and in doing so somewhat offsets that great superannuation 4 00:00:08,600 --> 00:00:10,640 Speaker 1: to bake. The returns came in at almost twelve percent 5 00:00:10,680 --> 00:00:12,720 Speaker 1: over the past year, so the fund has ground to 6 00:00:12,760 --> 00:00:15,440 Speaker 1: eighty five billion dollar suggestions now it'll crack one hundred 7 00:00:15,480 --> 00:00:19,240 Speaker 1: billion by twenty twenty eight. Joe Townsend is the super 8 00:00:19,239 --> 00:00:23,120 Speaker 1: Fund CEO. Joe morning, Good morning, mine, and well done. 9 00:00:23,160 --> 00:00:25,479 Speaker 1: You must be pleased with us. The activity, intensity of 10 00:00:25,520 --> 00:00:28,440 Speaker 1: activity versus riding the markets? How active are you? 11 00:00:30,640 --> 00:00:33,839 Speaker 2: So the result of eleven point eighty four percent was 12 00:00:34,680 --> 00:00:38,760 Speaker 2: surely reflective of very strong global equity markets after over 13 00:00:38,800 --> 00:00:43,559 Speaker 2: the past year. However, through our active investment strategies, we 14 00:00:43,640 --> 00:00:47,440 Speaker 2: did manage to add almost an additional one percent, which 15 00:00:47,520 --> 00:00:49,280 Speaker 2: you know might not seem like it's at all for 16 00:00:49,280 --> 00:00:51,640 Speaker 2: a lot, but it's the equivalent of about seven hundred 17 00:00:51,640 --> 00:00:53,960 Speaker 2: and forty five million dollars over the past year. 18 00:00:54,120 --> 00:00:55,640 Speaker 1: What do you make at the markets at the moment? 19 00:00:55,680 --> 00:00:58,400 Speaker 1: Because people who don't follow this, excuse me, we're all 20 00:00:58,400 --> 00:01:00,600 Speaker 1: in a cost of libining crisis year. The markets are 21 00:01:00,600 --> 00:01:01,160 Speaker 1: through the roof. 22 00:01:02,440 --> 00:01:04,679 Speaker 2: Yeah, well, it's interesting, right because I look at the 23 00:01:04,760 --> 00:01:07,720 Speaker 2: numbers over the past five years, and they've been incredibly 24 00:01:07,800 --> 00:01:11,839 Speaker 2: strong despite what seems to be an ever increasing amount 25 00:01:11,880 --> 00:01:14,360 Speaker 2: of uncertainty in the world. So it just goes to 26 00:01:14,480 --> 00:01:17,320 Speaker 2: show that, you know, it's almost impossible to pick what 27 00:01:17,440 --> 00:01:20,280 Speaker 2: the market's going to do over the short term, whether 28 00:01:20,319 --> 00:01:22,800 Speaker 2: it be one year or five years. You know, our 29 00:01:22,920 --> 00:01:25,720 Speaker 2: job is to build a portfolio that is resilient enough 30 00:01:25,800 --> 00:01:28,240 Speaker 2: that we can cope with markets when they're going up, 31 00:01:28,280 --> 00:01:30,440 Speaker 2: which they've been doing for quite a long time now, 32 00:01:30,840 --> 00:01:33,839 Speaker 2: but also to cope with markets when they're not so good, 33 00:01:33,840 --> 00:01:36,400 Speaker 2: and you know, we saw an episode of that earlier 34 00:01:36,440 --> 00:01:40,200 Speaker 2: this year with the announcement of the tariffs. You know, 35 00:01:40,319 --> 00:01:42,640 Speaker 2: for a long term investor like us, we try really 36 00:01:42,680 --> 00:01:44,600 Speaker 2: hard not to get caught up in the day to 37 00:01:44,680 --> 00:01:48,120 Speaker 2: day noise as markets, and so when markets are falling 38 00:01:48,200 --> 00:01:51,800 Speaker 2: during periods like that, you know, that's very much It 39 00:01:51,840 --> 00:01:54,480 Speaker 2: can be a good buying opportunity for us to go 40 00:01:54,520 --> 00:01:57,760 Speaker 2: into different markets and pick up assets that are cheaper 41 00:01:57,800 --> 00:01:59,760 Speaker 2: than what they were previously. 42 00:02:00,160 --> 00:02:02,600 Speaker 1: How unusual is what we're seeing at the moment in 43 00:02:02,680 --> 00:02:05,000 Speaker 1: terms of the tariffs and the presidency and the global 44 00:02:05,040 --> 00:02:08,880 Speaker 1: trade situation and all that. How wacky is it? Oh? 45 00:02:08,919 --> 00:02:13,239 Speaker 2: Look, it's really difficult to do scenario testing for environments 46 00:02:13,280 --> 00:02:15,720 Speaker 2: like we're in at the moment because the outcomes can 47 00:02:15,760 --> 00:02:19,720 Speaker 2: be quite binary and it's really difficult to forecast where 48 00:02:19,760 --> 00:02:22,240 Speaker 2: market's going to go. And so, you know, we do 49 00:02:22,320 --> 00:02:25,720 Speaker 2: a lot of scenario testing. But again, our job is 50 00:02:26,000 --> 00:02:28,840 Speaker 2: to make sure that we've got the most robust portfolio 51 00:02:28,960 --> 00:02:32,200 Speaker 2: that we can build for all all different market environments. 52 00:02:32,600 --> 00:02:35,840 Speaker 1: Is it robust with blue chip you know safety or 53 00:02:35,960 --> 00:02:38,040 Speaker 1: are you you know, in the corner they're doing a 54 00:02:38,080 --> 00:02:40,799 Speaker 1: little bit of risk? Oh? 55 00:02:40,840 --> 00:02:43,720 Speaker 2: Well, the thing about investing is that you have to 56 00:02:43,760 --> 00:02:46,600 Speaker 2: be prepared to take some risk to earn additional returns. 57 00:02:47,120 --> 00:02:49,760 Speaker 2: And so we spend an awful lot of time thinking 58 00:02:49,800 --> 00:02:53,679 Speaker 2: about risk and assessing where we believe we understand risk 59 00:02:53,720 --> 00:02:58,800 Speaker 2: and it's a worthwhile investment to make. But our starting 60 00:02:58,840 --> 00:03:02,840 Speaker 2: position is that we have an eighty percent allocation to equity, 61 00:03:03,040 --> 00:03:07,760 Speaker 2: and that is a reasonably growth oriented, risky starting position, 62 00:03:08,040 --> 00:03:11,480 Speaker 2: and so we believe that that's an appropriate setting for 63 00:03:11,560 --> 00:03:14,800 Speaker 2: a fund life the New Zealand Superfund. Because we are 64 00:03:14,880 --> 00:03:18,320 Speaker 2: a very long term investor, This fund will not peak 65 00:03:18,840 --> 00:03:21,760 Speaker 2: in terms of its importance to Zealand in terms of 66 00:03:21,800 --> 00:03:27,160 Speaker 2: its GDP for another fifty odgs. Well, and so at 67 00:03:27,160 --> 00:03:30,840 Speaker 2: context where you believe that risk will be rewarded if 68 00:03:30,840 --> 00:03:34,720 Speaker 2: you take risk, well, we think it's an appropriate setting 69 00:03:34,720 --> 00:03:35,560 Speaker 2: for the fund to have. 70 00:03:35,960 --> 00:03:38,400 Speaker 1: Nice and I appreciate Joe Joe Townshend, and I mean, 71 00:03:38,440 --> 00:03:40,280 Speaker 1: you can't argue twelve percent over the past year. And 72 00:03:40,280 --> 00:03:42,120 Speaker 1: as I've seen if you followed the fund over the 73 00:03:42,200 --> 00:03:45,520 Speaker 1: years when alls running it, they've always In fact, it's 74 00:03:45,560 --> 00:03:47,600 Speaker 1: one of the in terms of returns, it's one of 75 00:03:47,640 --> 00:03:51,160 Speaker 1: the most successful funds in the world, which is good 76 00:03:51,720 --> 00:03:54,640 Speaker 1: for more from the Mic Asking Breakfast, listen live to 77 00:03:54,760 --> 00:03:57,800 Speaker 1: news talks. It'd be from six am weekdays, or follow 78 00:03:57,840 --> 00:03:59,360 Speaker 1: the podcast on iHeartRadio.