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.

 

It came as a surprise to us last week that the Reserve Bank decided not to lift the OCR, despite recurring inflation in New Zealand.

Nerves are also running high for the election outcome this Saturday.

The Brazilian election saw their currency drop the most since 1999. The left-wing Lula government retained power, with a punishing tax burden of 34% of GDP.

 


Source: Bloomberg / X

 

New Zealand’s OCR (2.75%) is now below the equivalents in Australia (4.60%), Britain (3.75%), and the US (3.75–4.00%). It’s around the levels of the European Central Bank — where they’ve been trying to kick-start growth for years in an economy weighed down by bureaucracy and generous welfare.

A weaker local currency can make offshore investing more challenging, and currency cycles often persist longer than equity market mispricing.

Should the National-led coalition return to power, might we reasonably speculate that the NZD will strengthen? Yes, in my analysis.

Meanwhile, clients with the bulk of their portfolios offshore will be welcoming the protection and gains that diversification provides.

 

Managed Account performance*

 

For the month of October 2026, we were down –1.77% across the composite portfolio (total aggregate TWR return across all portfolios following the strategy).

Our average annualised return since inception is 12.73% p.a.

Please see our performance chart for more details.

 

Benchmarking

 

Our MSCI EAFE benchmark was up 0.53%.

The S&P 500 benchmark was down –1.13%.

Our blended MSCI EAFE/S&P 500 benchmark was up 0.28%.

We did a little worse than our benchmark this month due to the rough ride for real estate on higher interest-rate fears. Over the long term, we expect to gain ground here and provide some protection against a wider correction in AI-related stocks.

In fact, history tends to show that when tech stumbles, REIT exposure can underwrite some very solid long-run returns:

 

 

The road ahead

 

Most investors think too short term.

When you’re buying carefully selected quality at value, your odds might even be better than what we’ve seen for almost a century across the S&P 500:

 

 

As Warren Buffett said (quoting his mentor Benjamin Graham): ‘In the short term, the market is a voting machine. In the long term, it’s a weighing machine.’

Looking ahead, we see more constructive conditions and believe there is potential for NZD strength over time. When oil prices do soften, inflation may ease, and interest rates in our target markets could moderate too.

This could reveal upward pricing on many of our picks, particularly across real estate holdings.

Meanwhile, we continue to focus on generating income from dividends alongside long-term capital growth. Across all our portfolios, the average projected dividend yield is currently 5.36%. Of course, dividends are not guaranteed and may fluctuate or be reduced.

Our long-term objective is to achieve approximately 10% annual capital growth from our value investments, in addition to this portfolio income. (This is a target, so results will depend on market conditions.)

Ultimately — whatever happens in elections — a generous, diversified income across a range of currencies that you don’t have to labour for is the key to financial freedom.

 

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).

 

 

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