As 2024 comes to a close, we’re pleased to share that we’ve delivered a strong annualised pre-tax return of
7.14% for our investors.

While this is a reduction from the previous quarter, it remains a notable achievement. With the average 12-month term deposit rate across major banks now at 4.75%, our return continues to demonstrate a significant premium – highlighting one of the key benefits of our fund.

Our result reflects the economic headwinds New Zealand is currently facing. The falling interest rate environment has meant we have lowered our lending rates to remain competitive while maintaining the level of risk we are comfortable taking.

Additionally, lending volumes have decreased slightly over the past couple of months, meaning that we have held higher levels of cash which has impacted the return.

However, we remain committed to our core principle of optimising investor return rather than maximising it. Put simply, this means ensuring we find the right balance between risk and return and not lending for the sake of it.

Recently, we’ve seen a significant rise in quality lending opportunities, bolstered by increased borrower confidence following the latest OCR cut. Many borrowers had delayed transactions, but activity is now picking up as confidence grows. Despite the challenges, we continue to deliver on our objective of consistently delivering a pre-tax investment return at least 1% above the four main banks’ average 12-month term deposit rates. With a return of 7.14%, we are exceeding this target by 239 basis points, reflecting our commitment to delivering superior outcomes for our investors.

The changing economy

One of our key strengths is our loan book. By using local and national market insights and judgements rather than being tied to benchmarks like the OCR, we maintain the flexibility to deliver higher returns, even in a declining interest rate environment.

As noted, the recent OCR reduction has boosted confidence, indirectly benefiting many of our borrowers by stimulating market activity. This activity strengthens borrower performance, enhancing our portfolio and supporting your returns.

Looking back over the year

As we look back over the year, we’ve focused on enhancing our technology while maintaining cybersecurity as a top priority. A key initiative has been the development of a new investor portal, designed to complement our personal service – not replace it.

We understand that many investors value the convenience of managing their investments online, and this portal will provide benefits for those who choose to use it. For those who prefer to call or email, our personal service remains unchanged. Further details are included later in this newsletter, and we’ll keep you updated as we approach the launch.

Connecting at investor meetings

One of my personal highlights of 2024 was meeting so many of you, and catching up with familiar faces, at our investor meetings across Christchurch, Auckland, Waikato, and the Bay of Plenty. With over 1,000 attendees, these events were more than just updates; they were an opportunity to connect, hear your thoughts, and strengthen the relationships that are so important to FMT.

The team and I really enjoy these opportunities to hear your feedback, answer your questions, and share our future plans. For those who couldn’t join us, we’ve included the key messages in this newsletter to ensure you’re kept up to date.

This edition also marks the 100th issue of our newsletter. Reflecting on past editions, it’s inspiring to see how much
we’ve grown while staying true to our core foundations: wealth protection, a conservative approach, and a commitment to personal service. These remain the same and are what sets us apart.

Looking ahead

As we move into 2025, our focus remains steadfast: delivering strong, consistent returns and protecting your investments. With a disciplined, long-term approach, we are confident in our ability to navigate both opportunities and challenges in the year ahead, supporting success for both our investors and borrowers.

Thank you for choosing FMT as your investment partner. On behalf of the entire team, we wish you and your loved ones a Merry Christmas and a Happy New Year.

Paul Bendall

CEO