Agile investing responds faster to market shocks and shifts.
Fresh volatility is shaking global markets – and for Milford Asset Management, it’s exactly the sort of time when active investing comes into its own. With new Trump-era tariffs adding to geopolitical tension and market uncertainty, the fund manager has been repositioning its portfolios aiming to protect capital and find new opportunities.
“This is where managers like Milford can really earn our stripes, when markets are volatile and falling,” said Milford financial adviser Jessica Travers.
The start of 2025 has marked a turning point.
“Since mid-February, when Trump started making noise about tariffs, we’ve pivoted towards more defensive companies and invested more outside the US, in regions like the UK and Europe, to help cushion our funds from the volatility.”
Milford’s message is simple: in uncertain times, agility matters.
“An active fund manager is trying to outperform the market by picking shares or assets they believe will do well, and avoiding those they think will face headwinds,” Travers said. “They actively research investments, speak with company management, and respond to emerging themes and what’s unfolding in real time.”
In contrast, passive funds follow an index such as the S&P 500 or NZX50, and do not adjust their holdings even when certain sectors become overvalued or risky.
“Passive funds will own the whole market and aim to match its performance, regardless of what’s happening economically. They’re not picking winners, they’re buying everything.”
That rigidity can be a weakness during turbulent periods – and it’s where active managers may offer real value. Milford’s hands-on approach means they can avoid vulnerable sectors, pivot to stronger regions, and make informed decisions based on forward-looking insight.
This responsiveness also helps explain why some investors are comfortable with higher fees for active funds. They're not just paying for stock selection – they're paying for oversight, adaptability, and a team working to manage risk in real time.
Milford has been adjusting its global exposure, increasing allocations to regions offering stronger comparative value and stability. “A number of UK sectors are screening as better value than parts of the US, which look expensive right now,” Travers said.
“We’ve been progressively adding in those areas because they’re currently more attractively priced and better placed to withstand global pressure, including the potential impact of Trump’s tariff policies.”
That flexibility, including the ability to manage risk proactively, is one of the biggest advantages of an active fund. “We can reduce exposure to sectors or stocks that look overvalued or vulnerable, whereas passive funds just keep holding them.”
It also helps Milford smooth returns for investors, which can be especially beneficial for those requiring regular withdrawals. “If we can cushion how much our funds move around, we reduce the chance of someone needing to take money out at the worst possible moment.”
The firm also uses tools such as put options, cash buffers and tactical asset allocation to help protect capital during turbulent periods. Milford is closely watching the evolving US-China tariff tensions and taking such action as adjusting its positions where companies are unduly exposed to rising import and export costs.
“As these negotiations unfold, we’re looking at the impact on the US economy and consumers, which companies are impacted, and positioning accordingly.” Against that backdrop, Travers said that for new investors who are considering their fund choices, it’s important to focus on what really drives long-term outcomes.
“When choosing an investment fund, look for a long-term, proven track record and strong after-fee returns. That matters more than just picking the lowest fees,” she said. “Not all returns are equal. A fund that delivers a similar return with less volatility might actually be a better fit for some investors.”
Travers acknowledged that active funds typically come with higher fees, but said most New Zealanders see value in paying for strong performance and oversight. “There’s a whole team of professionals behind those decisions, analysing and researching. And if it leads to stronger returns, Kiwis tend to see the value.”
Milford’s ability to engage directly with local companies is another key benefit of its approach
“In New Zealand and Australia, active managers can get very close to the companies we invest in. For most NZX firms, our team can speak directly with the management. That gives us a strong picture of the businesses we’re backing,” Travers said.
“Volatility can create really good opportunities. We’ve seen this before, and we’ll see it again. If you’ve got a long-term timeframe, stay focused on your goals. And if you’re feeling unsure or nervous, speak to your investment manager or financial adviser before making any big decisions.
“Milford has a proven track record of strong long-term returns and a large team working hard to manage risk on behalf of New Zealand investors.”
To learn more about Milford’s approach to long-term investing, visit milfordasset.com or speak with one of their financial advisers.
This article is intended for general information purposes only and does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment, tax or financial advice. Past performance is not a reliable indicator of future performance. Investment involves risks, and returns can be negative as well as positive. Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at milfordasset.com. Before investing, you may wish to seek financial advice. The Disclosure Statements for all Milford Financial Advisers contain more information and are available on request, free of charge. See Milford’s Private Wealth Limited Financial Advice Provider Disclosure Statement at milfordasset.com/getting-advice.
