Monthly, we update our wholesale investors on what’s happening in the market. Running what’s probably the only late-night trading desk from New Zealand, we’re well-positioned to feel the pulse of the market’s direction.
This August, the market seemed to be in a holding pattern, awaiting thrust.
While we’ve held flat across portfolios, there’s been visible tension at the trading desk. The oil price remained firm on Iran uncertainty. Demand for US bonds from strong AI capital investment and a riskier world saw yields spike. Enough to force US Treasury buybacks. Europe was weighed down on inflation risk from energy.
The next few months will be pivotal as investors gain more clarity on inflation and interest rates.
Any relief at the pump, the bank or the bond desk could see the major boost in equities we’ve been positioning for. Meanwhile, our strong dividend yields continue to produce decent streams of income.
And we come to a pivotal situation for New Zealand’s future.
An electoral choice between aspiration and envy is appearing all over the world.
Source: The Atlas Society / X
I don’t want New Zealand to end up in the same place either.
Many of our readers and clients are concerned that the Left bloc has been ahead in the polls — driven in part by the media‑made TOP party.
It’s a concern because of the raft of tax changes being demanded. Higher income taxes. Capital gains. Wealth taxes. Land taxes. And yes, beyond the grave, inheritance taxes eating at any legacy for your children.
It’s not just about tax. It’s about the mental damage.
When governments start signalling that aspiration is suspect and success is something to be harvested rather than encouraged, the harm goes far beyond money.
It hits the people who work, who save, who plan ahead, who take risk, who build for a better future.
A friend has just returned from the UK. The business owners and young people he spoke to describe the situation as terminal. Everything is taxed heavily. Living standards are sinking. Despair feels locked in.
In my recent segment on the Money Talks radio show, I outlined that the best option for New Zealand voters may be to create a significant overhang by giving their electorate vote to National and their party vote to NZ First or ACT. If you’re interested in how this works — there’s a diagram here.
Some are considering the worst-case scenario: Labour forming a government with wealth-tax concessions.
Source: Malakai / X
Given the risk of destructive capital, wealth, and land taxes, probably the best contingency plan is a global portfolio not tied to any single country.
Capital today is mobile. So are our global portfolios.
The Left fails to realise that many countries compete for wealthier residents. From Italy’s 7% flat tax on portfolio income in southern towns, to Portugal’s potential 0% on foreign dividends, to Panama and Uruguay’s territorial exemptions — there are many options.
For many, a high-tax New Zealand simply means Australia becomes much more attractive.
Of course, that is not to say that prosperous Kiwis don’t want to pay tax. Most do. We want decent health, education, and superannuation systems.
The issue here is that taxing capital, land, and wealth forces people to pay — in some cases — more in tax than they actually earn in income.
Managed Account performance*
For the month of August 2026, we were down –0.04% across the composite portfolio (total aggregate TWR return across all portfolios following the strategy).
Our average annualised return since inception is 13.33% p.a.
Please see our performance chart for more details.
Benchmarking
Our MSCI EAFE benchmark was up 1.35%.
The S&P 500 benchmark was up 1.13%.
Our blended MSCI EAFE/S&P 500 benchmark was up 1.32%.
Our higher real estate weighting placed us slightly below the benchmarks this month. Should the interest-rate outlook moderate again, we expect this positioning to become accretive and support outperformance.
The road ahead
Look out for our next Coffee & Capital event — a New Zealand election special.
Meanwhile, we will continue building robust and resilient global portfolios for our clients. Providing the optionality of income with prudent, risk-managed growth.
There remains significant unrealised value in the market.
September can be a seasonally weak month.
Source: Ryan Detrick / X
Liquidity is often thin after the Northern Hemisphere summer. Institutions rebalance and harvest tax losses. Behavioural biases create a self-reinforcing expectation of weakness.
For us, we see September as a month where volatility is more likely. And, crucially, where dislocations can create opportunity for savvy buyers.
Regards,
Simon Angelo
Editor, Wealth Morning
*Past performance is not an indicator for future performance. Your actual portfolio will differ from the composite portfolio mentioned. The information contained in this document does not constitute an offer to sell or a solicitation to buy an investment, nor should it be construed as investment advice. Wealth Morning Managed Accounts are available to Eligible Investors and Wholesale Investors (not to Retail Investors) as defined in the Financial Markets Conduct Act (2013).
