What happened in the markets in November?

20 December 2021

News of the new Omicron variant broke late in the month, resulting in modest volatility in global share markets. Markets don’t tend to like uncertainty, and there’s still a lot we don’t know about the Omicron variant. Much more data is needed, but initial suggestions are that it is more transmissible but potentially less severe than the Delta variant. Vaccine makers are optimistic that existing vaccines will provide some protection, and Omicron-specific vaccines can be developed reasonably quickly if required.

For New Zealand based investors, the volatility of the global share markets was offset by the NZ dollar falling. The NZ dollar depreciated against most major currencies, supporting the returns of unhedged overseas assets (assets that are free to move with exchange rates). The result was a positive 3.2% return for unhedged overseas investments.

Fixed interest portfolios provided the diversification we expect during a period of equity market volatility. Both global and New Zealand fixed interest portfolios returned almost 1%.

In New Zealand, the Reserve Bank hiked the Official Cash Rate 0.25% as expected, taking the rate to 0.75%. Their updated forecasts now show the OCR reaching 2.5% by mid-2023.


Accessing unlisted New Zealand investments

Over the past few years, we have broadened our active management efforts to include unlisted investments, helping New Zealanders access investment opportunities outside of public markets. Our multisector funds now include a small allocation to productive NZ land investments (via our Private Land and Property Fund), established private NZ businesses (via our Tahi fund), and innovative NZ startups (via our Booster Innovation Fund).

In November, we made our Booster Innovation Fund available for investors to invest in directly. Investors can now complement their existing portfolios with a modest allocation to early stage New Zealand technology companies, potentially enhancing returns over the long-term. Notwithstanding the potential returns, early-stage investing does come with risks – it is generally considered the riskiest type of equity investing.

Investing in an innovative future

The Booster Innovation Fund currently has investments in 14 early stage companies operating across a range of industries from biotechnology to materials science. Exciting recent additions to the fund include Amaroq Therapeutics, PowerON, and XFrame.

 

Amaroq Therapeutics

Amaroq Therapeutics, a new biotech start-up spun out of the University of Otago, is advancing its programs to develop next-generation RNA therapy to target cancer.

The Amaroq Therapeutics team are exploring the use of lncRNA molecules as therapeutic targets and diagnostic markers in the treatment of cancer. They will be working on therapies to treat common cancers such as breast and liver cancer.

 

PowerON

PowerOn’s soft, multifunctional robotic structures aim to revolutionise robots and their future uses. Their technology will enable soft, friendly, lifelike robots with a sense of touch that can interact with users and their environment more naturally.

PowerON’s proprietary technology opens up new products and applications, not only in robotics, but in automation, e-commerce, agritech, medical and more.

PowerOn’s vision is to enable the use of intelligent robots and soft devices in daily life, at work and at home; where physicians, physiotherapists and nurses can train with lifelike models of the human body; where prosthetics don’t hurt after an entire day of wear and feel like natural limbs; and where industrial workers will be supported by biomimetic robots that are accepted as real helpers, not cold, unfriendly, machinery.

 

XFrame

XFrame™ is a recoverable and reusable framing system for the next generation of sustainable building construction. XFrame™ aims to replace the current waste-creating approach of platform timber framing with a structure that enables all adjoining wall layers (things like internal wall linings, insulation, and cladding) to be connected in a reversible manner that maintains building integrity.

The XFrame™ product makes recovering and separating building materials fast and easy and it aims to become financial best practice to recover and reuse XFrame™ materials rather than dispose of them.

 

Your allocation to innovative kiwi companies going forward

It is exciting to update you on these investments which all have huge potential! And because these companies aren’t listed on the stock market, we think they represent unique investments that other investors haven’t been able to tap into. Going forward, we aim to further diversify the Booster Innovation Fund by expanding its investments from 14 to more than 40. To help fund this expansion, in November we made the Booster Innovation Fund available for direct investment via our website. We intend to quote the units in the fund on the Main Board of the NZX next year to make it make it even more accessible. For more information, see booster.co.nz/booster-investments/booster-innovation-fund.

 


The Booster Innovation Fund (fund) is part of the Booster Innovation Scheme which is issued and managed by Booster Investment Management Ltd (Booster). The fund’s Product Disclosure Statement is available at www.booster.co.nz

Disclaimer: This document is for information purposes only. The information is derived from sources believed to be accurate as at the date of issue and may change. The content is of a general nature and is not financial advice. Booster, its related companies, directors, board members and nominees do not accept any liability for any loss or damage arising directly or indirectly out of the use of, or reliance on, the information provided in this document, nor do they guarantee the fund’s performance, returns or repayment of capital.