For financial advisors

Key Metrics

Returns, after fees, in New Zealand dollars, both pre- and post-tax

MSCI ACWIPre-taxPost-tax
Net, in NZD(0% PIR)10.5% PIR17.5% PIR28% PIR
CAGR13.03% pa23.28% pa21.99% pa21.03% pa19.58% pa

Over this time period:

  • The Fund gained in 68% of the months, and lost ground in the other 32%.  Put another way, the Fund typically has 3 or 4 losing months every year. 
  • The Fund’s worst ever 12 month return was -6.4%, for the 12 months from January 2018 to December 2018.  There were only 2 months out of the 5 years when the “through 12 months” return was negative.
  • The Fund’s worst ever 2 year return was 11.0% pa, for the 2 years from June 2017 to May 2019.
  • The Fund’s worst ever 3 year return was 12.1% pa, for the 3 years from June 2016 to May 2019.

Compared to the MSCI ACWI, net in NZD, the Fund has a beta of 1.44.  So the Fund has achieved 1.78x the returns of its benchmark index but with a beta of 1.44.

Frequently Asked Questions

Q. What does this Fund invest in?

The Fund invests in extremely large-cap stocks listed on the NYSE and Nasdaq.  We restrict ourselves to that universe because we highly value liquidity.  Within that universe we primarily look for stocks that we believe have above-market medium-term growth prospects.  But they also need to have strong profitability, conservative capital structures, good ESG scores and so on.

Q. How is it different from other global equities fund?

Firstly, there’s the tilt towards growth.  

Secondly, the Fund holds 20 positions so it’s a fairly high conviction sort of philosophy.  But we want to generate alpha for our investors, and the more positions you have the harder and harder it gets to generate that alpha.  We’ve found that for us about 20 positions is a sweet spot between diversification and alpha.

Q. Does the Fund invest in FAANG and Tesla?

The Fund does invest in a few of the FAANG stocks, but actually we’re under-weight in that set.  And we don’t invest in Tesla, as an example, because it doesn’t have the sort of robust profitability and conservative capital structure that we look for.

Over the years the Fund has invested in everything from auto-parts stores, to surgical robots, to restaurants, to educational institutes.  We have a particular “recipe” of company characteristics we look for and we’re continually surprised with the breadth of companies and industries we find those in.  We do think investors would be unlikely to stumble on many of the stocks we identify and end up investing in.

Q. Can my clients get their money out quickly?  How liquid is this investment?

Yes they should be able to.  

Our philosophy is that you can never have too much liquidity, because when you really do need liquidity it can be very hard to find.  So one of our objectives is that we should always be able to liquidate the Fund’s entire holdings in less than a day without unduly affecting the market prices.  That’s why the Fund invests in large-cap global stocks – because that level of liquidity can be hard to find on the NZX and ASX.

Q. Will you pay regular distributions?

No.  The securities the Fund invests in don’t tend to pay large dividends, and so we don’t expect the Fund to pay distributions to its investors in turn.  Any dividends the Fund does receive are re-invested rather than being distributed.

That said, the Fund’s underlying liquidity means investors can schedule regular drawdowns or withdrawals that would mimic distributions.  That’s an easy thing for us to arrange.

Q. Is the Fund on the major wrap platforms?

Not yet (as at April 2021).  We do want to be on the major wrap platforms but that often requires financial advisors to request a fund or product be added.  So we’d appreciate your help in working with us to get the Fund on to those platforms as soon as possible.

Q. Could you come and see us?

Absolutely.  We value face-to-face meeting and we’re up for coming to visit any advisors and firms who’d like to talk with us.  Just drop us a line at and we’ll arrange to come and meet with you.

Note: The content provided here is written by us, Lighthouse Funds, as general information that we trust is helpful and informative. It’s based on information that we believe to be accurate and reliable, although we can’t guarantee that this is the case. It isn’t intended to be personalised advice for any investor, or class advice for any group of investors. We recommend that before entering into any investment you first seek advice from a financial advisor who can give you professional advice that takes into account your objectives, needs, financial situation and circumstances. Please see our disclaimer.