Fund watch

Reasons to still be positive on the retirement sector

As well as investing in listed property companies, the MFL Fund can invest in the shares of companies in New Zealand and Australia that have a large property component associated to them. One such area is the retirement sector.

The fund has a significant exposure to this sector, of around 15%. As well as helping to diversify the fund, it gives investors access to the important, and historically strong-performing areas of the New Zealand and Australian equity markets.

In 2022, the retirement sector, especially here in New Zealand, struggled against the backdrop of rapidly rising interest rates, a cooling residential property market, and weakening consumer confidence. This impacted the retirement sector as the conditions in the residential housing market made it hard for retirees to sell their existing house. In the year to December, total residential house sales were down 30%.

Despite this, there are many positives to be said for the outlook of this sector. Underlying demand for retirement villages continues to grow as the baby boomer generation ages, and the number of New Zealanders aged over 65 years is set to increase by around 46% over the next 15 years.

For these reasons we continue to favour the retirement sector. Our largest retirement positions within the MFL fund are Summerset and Oceania Healthcare.

This article has been prepared by ANZ New Zealand Investments Limited (‘ANZ Investments’) for information purposes only and it should not be treated as financial advice.

MFL Mutual Fund Limited is the issuer and manager of the MFL Mutual Fund. ANZ Investments is not an authorised deposit taking institution (ADI) under Australian law and investments in the scheme aren't deposits in or liabilities of ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited, or their subsidiaries (together 'ANZ Group'). ANZ Group doesn’t stand behind or guarantee ANZ Investments. Investments in the scheme are subject to investment risk, including possible delays in repayment, and loss of income and principal invested. ANZ Group won’t be liable to you for the capital value or performance of your investment.

Past performance does not indicate future performance, and performance can be negative as well as positive. This material is for information purposes only. We recommend seeking financial advice about your situation and goals before getting a financial product.

Investment and administration manager: ANZ New Zealand Investments Limited.